Used Vehicle Prices May Have Bottomed For The Year; Could UAW Strike Reignite Inflation?

Auto analysis agency Cox Automotive – the proprietor of the intently adopted Manheim price index – printed new knowledge for August that reveals wholesale used-vehicle costs marginally elevated on a month-to-month foundation for the primary time since March. 

The Manheim Used Vehicle Value Index stood at 212.2 in August, up 0.2% from July. The index is down 7.7% from a 12 months in the past. These costs normally filter into the retail aspect of the market with a slight lag. 

“August brought a stop to wholesale price declines, though it was only a small reversal of the larger magnitude declines so far this spring and early summer,” Chris Frey, senior supervisor of Economic and Industry Insights for Cox Automotive, wrote in a press launch. 

Frey stated, “Historically speaking, the monthly figure aligns with the 0.3% average we’ve seen since 1997. Sure, there were swings in August during the financial crisis, the COVID reopening period of 2020, and the 2022 doldrums; but this year, the performance looks more ordinary. Like last month’s note, the current Manheim Index level of 212.2 is barely above that of the 212.1 measure seen in August 2021.” 

“Used market conditions have been quite consistent for a few months and are not likely to change much, even with the larger push toward balance; sales are slightly stronger than expected, inventory remains tight, and prices are holding at levels around 6% below last year at the same time. These factors are expected to prevent any substantial decline in wholesale prices through year-end,” he famous. 

Given what Frey has described, the wholesale used automobile costs might have bottomed for the rest of the 12 months. 

First month-to-month enhance since April.

And year-over-year declines seem to have stabilized within the first eight months of the 12 months. 

Cox additionally confirmed that used-vehicle retail gross sales in August have been up 5% versus July, and the year-over-year comparability with 2022 improved marginally. The common used automobile worth was round $27,000, barely decrease versus July however nonetheless at historic highs. Consumers are nonetheless shopping for even with used automobile rates of interest at ranges not seen because the Dot Com bust. 

Suppose the United Auto Workers have been to strike towards the “Big Three” US automakers – General Motors, Ford, and Stellantis (Chrysler) – resulting from labor contract disputes. Could that be the catalyst to reignite used automobile costs?