Dealers who pay more mean you’ll pay more
The Manheim Used Vehicle Value Index tracks the prices car dealers pay at auctions for used cars. It rose more than 5% in September alone. Wholesale used car prices are now 27.1% higher than a year ago.
The average used car was priced at almost $ 26,000 at the end of August. An increase in wholesale prices means that figure is likely to rise when September figures are final.
A global shortage of microchips has pushed new car prices to record highs. Automakers have slowed down or stopped production of many cars because they can’t find enough chips to make them. But buyers continued to snatch them from the auction lots. It drives up prices.
The high prices of new cars are causing some buyers to turn to used cars instead. This drives up the prices of used cars.
Cox Automotive Chief Economist Jonathan Smoke explains, âThe new vehicle production problem got worse rather than better in the third quarter. Used inventory problems were further exacerbated by damage to vehicles from Hurricane Ida in late August, putting pressure on an already historically strained market.
Cox Automotive is the parent company of Kelley Blue Book.
Some buyers can expect high prices
High prices prevent buyers from accessing both markets. Total new car sales fell 25% in September from a year ago. Research from Kelley Blue Book shows that some buyers are now trying to wait for the high prices of new cars.
The same phenomenon may be taking hold in the used car market. Total used vehicle sales fell 13% year over year in September.
Dealers paid more for each type of used car in September. Sport utility vehicles and vans saw the biggest price increase.