It hasn’t been the crash I predicted but used car prices have been in a slow decline for three months. We are coming up on the time of year that prices always fall around the end of August, so think about trading that used car now incase this trend continues.
- Jerry Reynolds, host of the Car Pro Show
Some good news for those of you looking for a used vehicle - and not so good news if you have a trade-in. Used car prices fell for a third straight month in June. According to data shared in a Cox Automotive press release, the major market segments all experienced seasonally adjusted prices that were down year over year in June.
Compared to June 2023:
- Pickups were the only segment that outperformed the industry, down 8.3% on the year.
- SUVs declined by 9.3% year over year.
- Luxury fell 9.9%
- Midsize cars fell 11.0%
- Compact cars were again the worst-performing segment, falling by 12.0%.
As for electric vehicles (EVs), seasonally adjusted values for June were down 16.6% compared to June 2023. Non-EVs were down 9.5% for the same period. Also when June is compared to May, seasonally adjusted EV values continued to decline more than the market overall, falling by 6.5% in June, while non-EVs declined only 0.3% over the same period.
Diminishing Lease Returns Start to Weigh on Used-Vehicle Market
Cox Automotive also reports that three-year-old vehicles, primarily sourced from lease returns, have consistently represented the highest volume age group sold at wholesale. However, the availability of these popular vehicles is declining. This downturn is expected to accelerate in July and persist through the rest of the year, negatively impacting inventory levels at wholesale. Cox Automotive forecasts a 12% drop in lease maturities for Q3, with a further decline of 17-18% in Q4. This downward trend will continue, reflecting the reduced share of lease sales during the pandemic years, and will impact used-vehicle inventory.
"In the second half of the year, the wholesale marketplace will start really feeling the impact of lower lease maturities coming back to the marketplace," Robb said. "This is a pattern that is not going to go away for the next two years, and we'll likely be dealing with it through 2026."
Retail Used-Vehicle Sales Decreased in June
Looking at retail used vehicle sales, the data show they dipped in June. Cox Automotive says assessing retail vehicle sales based on observed changes in units tracked by vAuto, initial estimates indicate that retail used-vehicle sales in June were down 5% compared to May, however they were up 3% year over year. The average retail listing price for a used vehicle was down 1% over the last four weeks.
Using estimates of retail used days' supply based on vAuto data, an initial assessment indicates June ended at 48 days' supply, up two days from 46 days at the end of May and down one day from 49 days at the end of June 2023.
To read more on Cox Automotive click here.
Photo credit: Paul Brennan/Shutterstock.com.