Used Car Prices Hit All Time High

Regular readers know that we consider used car prices an important, if overlooked, indicator of the true state of the US economy. More Americans buy used vehicles than new ones, making them a deeper measure of consumer sentiment. And since the supply of used cars and trucks is essentially fixed – you can’t “make” one – prices are exceptionally twitchy and move noticeably on both dealer (and therefore small business) sentiment and underlying retail demand.

The Manheim Used Vehicle Index is one widely watched measure, and it just made a new all time high for data from July 2018 auction results.

The numbers and some historical perspective:

Wholesale (the index tracks dealer-only auction results) prices for used cars/trucks were +1.5% from June to July 2018 and +5.1% versus July 2017.

More affordable vehicles saw the largest price increases, with compact and midsized cars outperforming the overall market. This is unusual; for the last several years it has been hotter-selling SUVs and pickup trucks that have led used vehicle prices higher.

Cox Automotive (which owns the Manheim auction business) notes that the overall used vehicle market (both dealer and private sales) is currently robust, with a July 2018 selling rate of 39.2 million vehicles, +3% over last year and at +5 year highs. For comparison, July 2018 new vehicle sales were flat versus last year.

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