A used Honda Pilot is displayed at the Honda Marin sales office in San Rafael, California on February 6, 2024.
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Used car prices are expected to continue to stabilize in 2025 and begin to calm down in 2024 after several years of wild fluctuations.
Automotive data and logistics company Cox Automotive Estimated wholesale price Its Mannheim Used Car Value Index, which tracks the price of used cars sold at U.S. wholesale auctions, shows it will end the year 1.4% higher than in December 2024. But that’s not the case.
By comparison, this year’s gains will be 0.4% higher in 2024, after falling 7% and nearly 15% respectively in 2023 and 2022 due to price increases during the Covid-19 pandemic. During this period, the used car price index grew at an all-time high, reaching 46.6% in 2021 and 14.2% in 2020.
During this period, the supply of new cars fell to an all-time low as supply chain and parts issues disrupted car production. The Biden administration pointed to rising used car prices as a key factor in inflation at the time.
The overall stability of pricing is a win for potential car buyers. However, used car prices are still higher than before the pandemic. Traditionally, consumer retail prices have followed wholesale prices, but in recent years retail prices have not fallen as fast as wholesale prices.
“We’re wrapping up some of the moves we made as a result of the pandemic,” Jeremy Robb, senior director of economics and industry insights at Cox Automotive, said on a conference call Wednesday. “There’s definitely going to be some in our forecast. fluctuation.”
According to Cox data going back to 1997, the average index change at the end of each year is 2.3%.
The index’s monthly change during the year was just 0.2%, Cox said.
Cox reports that starting December, the average used car listing price was $25,565, up slightly from $25,493 last month but now down 3 percent from a year ago.
Cox Automotive predicts that by 2025, used car sales will increase 1% annually to 37.8 million units. The forecast includes used car retail sales of 20.1 million units, a 1.2% increase.
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