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Wholesale used-vehicle prices fell substantially’ through August

Wholesale used-vehicle prices fell “substantially” in August to cap off a summer that were marked by more gradual monthly price declines.

Cox Automotive said Thursday that wholesale prices declined 4 percent in August weighed against July. The Manheim Used Vehicle Value Index an indicator of used-vehicle market pricing trends declined to 210.8, down from 219.6 in July.

But wholesale prices remained elevated year over year. These were 8.4 percent higher in August than in the year-earlier period, once the index stood at 194.5. Those numbers are adjusted for mix, mileage and seasonality.

On a nonadjusted basis, the index fell 2.6 percent in August from its July level, with prices up 5.9 percent year over year.

Used-retail sales did see some growth, rising 11 percent in August from July. But sales were down 9 percent weighed against once last year, if they were better quality, in accordance with Cox Automotive.

Average wholesale charges for 3-year-old vehicles, the biggest model year cohort at Manheim’s auctions, fell 2.5 percent over the last a month.

Cox estimated used-vehicle retail supply stood at 47 days by the end of August. That has been down from 53 days by the end of July but up from 38 days in August 2021. Wholesale supply ended August at 27 days, less than 31 days in July but greater than 21 days in August 2021.

Black Book, which maintains another indicator of wholesale pricing trends the Used Vehicle Retention Index said the marketplace saw continued declines in the week ended Sept. 3.

The entire rate of depreciation that week was “consistent” using what Black Book saw in the last five weeks. Luxury segments reported the biggest declines, with some depreciation rates exceeding 1 percent the week ended Sept. 3, in accordance with Black Book.

Though wholesale prices are anticipated to help expand decline within the next one or two years, they’ll likely be 30 to 40 percent above pre-COVID levels, in accordance with an estimate from Alex Yurchenko, Black Book’s chief data science officer.

“We have been in this elevated price environment for the near future,” Yurchenko said Wednesday. “The primary reason is inventory. We’re not likely to have exactly the same degree of used inventory returning to the marketplace within the next many years.”

Said Yurchenko: “Based on just how long the chip shortage or overall supply chain issues last, we may see this limited used-inventory environment for three, 4 or 5 years, based on how fast we are able to reunite some normality in the brand new market.”

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