Used vehicle prices fell last month for the first time in 2023

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A used car dealership is seen on May 27, 2021 in Annapolis, Maryland, as many car dealerships across the country are running low on new vehicles as a computer chip shortage nearly halted production at many automakers.

Jim Watson | AFP | Getty Images

DETROIT — Wholesale prices for used vehicles fell last month for the first time this year, as automakers ramp up production of new cars and trucks.

Cox Automotive on Friday reported a 3% decline in March to April Mannheim Used Vehicle Price IndexHowever, the level remains high compared to historical figures.

The index, which tracks vehicles sold at its U.S. wholesale auctions, is still up 5.2% from December, but down 4.4% from April 2022.

“We’ve experienced eight straight months of year-over-year declines, averaging 8.3%, and it’s not over yet,” Chris Frey, Cox’s senior manager of economic and industry insights, said in a release.

Used vehicle prices have risen since the start of the coronavirus pandemic, as new vehicle production has been sporadically idled due to the global health crisis coupled with supply chain issues. This led to record-high prices for new vehicles amid short supply and resilient demand. The cost and shortage of inventory led consumers buy used vehicleThose prices also increase.

Further declines could help ease used vehicle pricing for consumers, as retail prices traditionally follow changes in wholesale prices.

Cox reports that the average listed price of a used vehicle was $26,086 in FebruaryThe latest available data is slightly lower than January.

“Prices are falling, but tight supply may provide some price support,” said Charlie Chesebrough, senior economist at Cox. “Used prices may fall further, but it looks unlikely to see a massive drop given the supply situation.”

Used vehicle prices have increasingly become a point of interest for investors and the Biden administration barometer to reduce inflation, The administration had earlier last year blamed the used vehicle market for rising inflation in the country.