After fluctuating sharply for a number of years before beginning to level out in 2024, used car prices are predicted to continue to stabilize in 2025.
Cox Automotive, a logistics and auto data company, projects that wholesale prices on its Manheim Used Vehicle Value Index, which monitors the costs of used cars sold at its wholesale auctions in the United States, will close this year 1.4% higher than they did in December 2024. According to Cox, pricing will vary from month to month owing to seasonality in sales and other reasons, but it won’t be as significant as it was in prior years.
Following declines of 7% and over 15% in 2023 and 2022, respectively, due to inflated prices during the Covid-19 pandemic, this year’s gain would be comparable to a 0.4% increase in 2024. During that period, index used car prices rose at historically high rates of 14.2% in 2020 and 46.6% in 2021.
The supply chain and parts issues that disrupted vehicle production during that period caused the availability of new automobiles to drop to historic lows. The Biden administration pointed out that one of the main causes of inflation at the time was the increase in the cost of used cars.
For prospective car purchasers, the general pricing consistency is a benefit. Prices for used cars are still greater than they were before to the pandemic, though. Although they have not decreased as rapidly as wholesale costs in recent years, retail prices for consumers typically follow changes in wholesale pricing.
In a call on Wednesday, Jeremy Robb, senior director of economic and industry analytics at Cox Automotive, stated, “We are ending some of the moves from the pandemic.” There will inevitably be some volatility in our prediction.
According to Cox statistics dating back to 1997, the average index move at the end of each year is a rise of 2.3%. The outlier years of 2021 and 2022 are not included in that.
According to Cox, the index’s typical monthly movement over the course of the year is about 0.2%.
According to Cox, the average listing price for a used car was $25,565 at the beginning of December. This was somewhat more than the $25,493 price the previous month, but it was still 3% less than it was a year ago.
For 2025, Cox Automotive projects that used car sales will rise by 1% year to 37.8 million. Retail sales of used cars are expected to rise by 1.2% to 20.1 million.
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