The wholesale prices that car dealers pay for used cars, which eventually end up on their sales lots, showed minimal change in January compared to December.
The Manheim Used Vehicle Value Index is a reliable indicator of the prices dealers pay as these trends often translate into retail pricing with a six-to-eight-week lag. Although the index is down 9.2% from a year ago, it remains unchanged from the previous month.
It’s important to note that Manheim Inc., the auction company, is owned by Cox Automotive, the parent company of Kelley Blue Book, which publishes the index.
“After experiencing significant volatility last year, it was a relief for the industry to witness a comparatively calmer month,” remarked Jeremy Robb, Cox Automotive’s Senior Director of Economic and Industry Insights.
Stability Expected in 2024 for Car Shoppers
While the average price of used cars saw a marginal increase in December, it still remained 3% lower than the previous year.
Experts at Kelley Blue Book anticipate that 2024 will be a stable and predictable year for car shoppers, assuming there are no unforeseen disruptions to global trade. Robb further adds, “As we approach tax refund season, we anticipate increased wholesale market activity. Overall, we maintain that 2024 will demonstrate more typical market trends throughout the year.”
Positive Outlook on Consumer Confidence
In January, the Conference Board Consumer Confidence Index grew by 6.3%, driven by a significant surge of 9.6% in favorable views of the present situation. This rise marks the highest level reached since March 2020. Furthermore, there was an overall year-over-year increase of 8.3% in consumer confidence. However, plans to purchase vehicles within the next six months decreased to their lowest level since April and registered a decline compared to the previous year.
This story originally ran on KBB.com_.