Used car prices have finally dropped, ending a steady increase since last October. According to the Manheim Used Vehicle Value Index by Cox Automotive, prices fell by 1.6% last month. However, they are still up 1.8% compared to last year.
High gas prices are pushing buyers toward older cars and electric vehicles. As of the end of April, gas prices were up $1.12 per gallon from last year, averaging $4.30 nationwide. This trend doesn’t look like it will end soon, with prices hitting $4.56 recently. Experts, including Cox Automotive’s chief economist Jeremy Robb, note that rising energy costs are eating into consumers’ budgets, limiting their spending options.
Retail prices usually align with wholesale trends. Cox forecasts a 2% increase in retail prices for used vehicles this year. The average listing price in March was around $25,390, a slight increase from February.
Interestingly, the average price for a used electric vehicle (EV) is still over $9,200 higher than other models. However, an uptick in gas prices has revived interest in EVs, especially after federal incentives ended last year. The Manheim index for electric vehicles rose by 7.2% year over year and 1.4% from March.
This price drop comes after a busy spring season, where many buyers used tax refunds to purchase used cars. The market is shifting, and while affordability remains a concern, the demand for older and electric vehicles continues to grow.
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