Wholesale used vehicle prices declined in November as the auto industry entered its seasonal slump.
According to Cox Automotive’s Manheim Used Vehicle Value Index, used vehicle prices declined 2.1% from October and 5.8% from November 2022. The pace at which car values depreciated varied between segments. Smaller passenger vehicles saw the most significant drop, falling 11.3% year-over-year. Meanwhile, pickups retained their value the most, with wholesale prices declining only 4.6%.
These downward shifts correlated with industry-wide trends of cooling demand due to a variety of factors, including inflated, interest rate hikes and improvements to vehicle durability. As a result, sales of preowned models also fell short, falling 7% month-over-month and 2% year-over-year.
While both new and used vehicle prices have fluctuated heavily since the COVID pandemic, 2023 has seen widespread normalization across both segments, with values inching closer to pre-2020 norms. Cox Automotive estimates that prices will fall roughly 4% from the 2022 average by the end of the year, although it notes that December may see slight gains in used vehicle values.
To combat declining sales and falling used vehicle prices, dealers will need to implement a variety of strategies that may have fallen to the wayside during the COVID pandemic. For example, retailers can identify new and cheaper opportunities to acquire inventory by searching for auction and trade-in alternatives. Sales teams can also boost their dealership’s performance by aggressively pursuing leads and following up with prospective buyers. Emphasizing training and education will be key to adapting to the normalizing marketplace.
