Used car prices high but expected to stabilize in 2024

DETROIT — Used vehicle prices are expected to stabilize this year, after buyers of pre-owned cars and trucks got more relief in 2023 following a stretch of record prices.

Automotive data firm Cox Automotive expects wholesale prices on its Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, will end 2024 only 0.5% higher than in December 2023. Pricing will fluctuate month to month due to selling seasonality and other factors, according to Cox.

The slight increase would compare with a 7% decline in 2023 and nearly 15% drop in 2022 from inflated prices during the coronavirus pandemic. At that time, availability of new vehicles fell to record lows due to supply chain and parts problems that interrupted vehicle production.

“2024 is looking to be less volatile than 2023, but we’ve been taught to expect the unexpected in the wholesale market,” Jeremy Robb, Cox Automotive senior director of economic and industry insights, said in a release.

The stability is a win for potential car buyers. However, used vehicle prices are still higher than they were before the pandemic. Retail prices for consumers traditionally follow changes in wholesale prices, but they have not fallen as quickly as wholesale prices in recent years.

Cox reports the average listing price of a used vehicle was $26,091 as of last month, down 3.9% from a year earlier and 7.5% lower than the roughly $28,200 to end 2021. Average listing prices for used vehicles were less than $20,000 in 2019, according to Cox.

Used vehicle sales are expected to increase by less than 1% to 36.2 million, according to Cox Automotive. That forecast includes 19.2 million in used vehicle retail sales.

The expected used vehicle sales compare with a “pessimistic” forecast of a 1.3% increase for new cars and trucks in the U.S. this year to 15.7 million units, according to Cox.

“For the economy and the auto market, we’re in for just 1% to 2% growth, but growth beats a recession,” Jonathan Smoke, Cox Automotive chief economist, said Monday during a call. “As we enter into 2024, new supply is back to spring 2020 levels, which favors consumers and leads to lower prices.”

Meanwhile, Cox expects all-electric vehicle sales to increase and make up more than 10% of retail new car and truck sales in 2024. That would compare with 1.1 million units, or 7.4% of retail sales, sold in 2023.