On the Dash:
- Used-vehicle prices are stabilizing, but remain sensitive to supply and macroeconomic pressures.
- Dealer margins continue to face compression as wholesale and retail dynamics rebalance.
- Inventory normalization is improving, but uneven supply and affordability challenges persist.
Cox Automotive reported signs of stabilization in the used-vehicle market in March, as the Manheim Used Vehicle Value Index showed more moderate pricing movement following recent volatility.
Wholesale used-vehicle prices saw slight month-over-month changes, reflecting a market that is beginning to level out after sharp fluctuations in prior periods. On a year-over-year basis, values continue to normalize from the elevated pricing seen during the pandemic, as supply conditions gradually improve.
Inventory levels are increasing across wholesale channels, supported in part by a rise in off-lease vehicles and fleet returns. However, supply remains uneven across segments, contributing to inconsistent pricing trends depending on vehicle type and demand dynamics.
Retail demand has remained relatively resilient, though affordability continues to be a key concern for consumers. Elevated interest rates and higher financing costs are influencing purchasing decisions, particularly in higher-priced segments. Lower-priced vehicles and certified pre-owned units are seeing comparatively stronger demand as buyers seek more budget-friendly options.
For dealers, the shifting dynamics are putting continued pressure on margins. As wholesale prices stabilize and retail pricing faces resistance from cost-conscious consumers, profitability is tightening. Dealers are responding by refining acquisition strategies, focusing on inventory discipline and faster turn rates to mitigate risk.
Performance varies across vehicle segments, with trucks and SUVs showing different pricing behavior compared to sedans. Electric vehicle pricing remains more volatile than internal combustion engine vehicles, reflecting evolving demand and market uncertainty in that category.
Looking ahead, Cox Automotive expects the used-vehicle market to continue its gradual normalization. Pricing stability will depend on the pace of inventory recovery and broader economic conditions, including interest rates and consumer confidence.
