Are Used Car Prices Going Up Or Down?

Mixed Messages in Used Car Prices
So what is really going on with used car prices? Some mixed messages for the first few months in 2022. Wholesale vehicle prices kind of dropped a little bit, not much but a little bit, for three months straight. Well, here in June, the prices went up after three months of sequential declines. Wholesale prices edged higher in May and this is right in the middle of having higher gas prices, inflation, higher interest rates on homes, and home prices still being up.

Factors Influencing the Used Car Market
So what gives? What’s going on with the used car market? Well, it could be that during the first few months of the year there was a little bit more new car inventory that kind of came out into the marketplace in, you know, February, March, April, and so used cars kind of slowed down a little bit. Maybe some dealerships got stacked up with vehicles in their used car department.

New Car Inventory Challenges
Well, now once we get into May and even June, new car inventory is even worse than it was. We’ve seen some data where some of the manufacturers have a 5 or 10-day supply of vehicles. Big manufacturers Mazda, Toyota, Honda, Subaru have a single digit or 10 or 15-day supply of vehicles. You can’t run a dealership with just that many cars.

Dealer Reactions and Questions
So maybe now dealerships are going back to the well to find some used cars to fund and supply their inventory. Let us know what you think. Are you a dealer? Why are you seeing used car prices go up? Are retail prices going up or are your margins getting thinner for your used car inventory?

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