The nation’s supply of used automobiles increased slightly in June as retail sales slowed, helping ease month-over-month price growth to a modest 0.4 percent after large early-year gains, according to Cox Automotive’s monthly used-car market analysis released on July 17.
Automotive dealers held 2.14 million used vehicles in inventory in June, which equates to 47 days’ worth of supply, Cox Automotive’s analysis of vAuto Live Market View data showed. That’s a 0.2 percent year-over-year increase and a 1 percent uptick from May, when dealerships held 2.12 million used cars and trucks at 45 days’ supply.
Used vehicle inventory hit a yearly low of 1.95 million vehicles and a 37-day supply in March due in large part to a surge in sales to 1.64 million vehicles for the month. The modest increase in supply in June is a boon to consumers, with sharp average price hikes seen since the start of the year easing for the first month of summer.
The average sales price of used vehicles was $25,533 in January, but by May it had spiked 5.4 percent to $26,928. The June average used-vehicle sales price of $27,027 on the sale of more than 1.36 million vehicles was up $99 from the previous month. Year over year, used car prices were up 6 percent in June.
“Used vehicles continue to offer a compelling value proposition compared with new models, and improving credit availability is helping support consumer demand,” said Scott Vanner, Cox Automotive’s manager of economic and industry insights, in the report.
“Credit access reached its highest level since December 2015 in June, providing buyers with greater financing opportunities.”
While sales of certified pre-owned vehicles rose 5 percent (210,355 units) year over year in June, they dipped 7.8 percent from May (228,148), Vanner noted. Certified pre-owned vehicles accounted for 15.3 percent of all used vehicle sales for June.
On the wholesale side, Cox Automotive’s Manheim Used Vehicle Value Index fell to 211.5 in the first two weeks of July, reflecting a 0.6 decrease in pricing that auto dealerships pay for used vehicles at Manheim auctions. The index had climbed to 213.9 during the same two-week period in June, as vehicle appreciation trended slightly higher.
“Wholesale values have been on the decline in the summer after seeing a strong and prolonged Spring Bounce earlier in the year, noted Jeremy Robb, chief economist at Cox Automotive.
“We’ve continued to observe stronger pricing trends in older ‘more affordable’ units as strapped consumers look to offset higher prices in the rest of the economy by shopping for cheaper used vehicles.”
With fuel prices remaining elevated due to the ongoing war in the Middle East—the national average cracked the $4-per-gallon threshold on July 20, the American Automobile Association reported—sales of used electric vehicles continue to power the Manheim index. EV sales were up 12.4 percent year over year in the first two weeks of July, though they did dip 0.4 percent from June.
By way of comparison, sales of internal combustion engine vehicles were just up 1.1 percent year over year, Cox Automotive noted.
“There’s more interest in used electric vehicles, with the segment rising to over 4 percent of all units driving the Manheim Index value—a level never seen before,” Robb said.
