Automotive research firm Cox Automotive – Car owners in the spotlight Mannheim Price Index – New data for October released this week showed that wholesale used car prices continued to decline and have reached the lowest level since April 2021.
The Mannheim used car value index in October was 209.4, down 2.3% from September and 4% from the same period last year. The penetration of these wholesale prices into the retail end of the market is slightly behind.
“October saw some less eerie price action, a reversal of gains from the previous two months,” said Chris Frey, senior manager of economics and industry insights at Cox Automotive.
Frey continued, “This confirms the caution noted last month regarding the UAW strike, averting an action that could have led to higher wholesale prices. October’s price decline is strikingly similar to last October’s 2.2% decline, This is not unexpected as the market remains balanced and wholesale vehicle prices typically see some slight increases during the holidays, and with the remaining two months we may see some price increases.”
Liz Ann Sonders, chief investment strategist at Charles Schwab, first pointed out on social media platform X that the Manheim Price Index “extended its maximum decline to -18%, which is the largest decline in the history of the index.”
X user car dealer guy say “strike” [UAW] It’s all over,” “Now back to reality. ” He said demand for used cars is weakening.
Bank interest rate data shows that the average lending rate for used cars has soared from around 3.85% in February 2022 to 7.3% this month, with demand declining. Used car prices remain above pre-COVID-19 highs, and such an interest rate shock has sparked an affordability crisis among consumers.
Wholesale used car prices have dropped by the most in history, which only means that more and more Americans who panic-purchased cars during the height of the coronavirus pandemic will find themselves in dire straits. Car loans in trouble.
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