Used car prices fall again in April, down nearly 17% from pandemic highs

Vehicle prices continued a downward trend in April, with the new car market slipping and used prices sliding the most of any major category in the Consumer Price Index (CPI) over the last year as the car market stabilizes after runaway price increases during the pandemic.

Used car prices fell 1.4% over the prior month in April and 6.9% from the prior year, data from the BLS showed on Wednesday. New car prices fell 0.4% in April and 0.4% from the prior year.

Compared to their peak in February 2022, prices paid for used vehicles are now down 16.8%. Used car prices rose more than 40% annually in both June and July 2021, and again in January and February 2022. Prices for used cars and trucks are still 29% higher than in April 2019.

In April, headline CPI rose 0.3% over the previous month and 3.4% over the prior year, a deceleration from March's 0.4% month-over-month increase and 3.5% annual gain.

The Manheim Used Vehicle Value Index (MUVVI), which tracks used vehicle prices paid at wholesale on a seasonally adjusted basis in the US, ended the month of April down 2.3% month over month and down a whopping 14% from a year ago.

Kelley Blue Book estimates Americans purchased 35.9 million used vehicles last year from dealers and private parties, just below 2022’s 36.3 million. Used vehicle purchases more than doubled new retail sales last year, which KBB estimates hit 15 million vehicles.

Manheim also noted weakness in the EV market in April, where automakers like Tesla (TSLA) are cutting retail prices, hurting prices paid in the used market.

The firm noted that seasonally adjusted EV values last month were down 17.5% from the prior year. For non-EV cars, prices fell 13.1%.

Still, KBB wrote in a report last week that lower prices aren't expected to boost auto sales figures, which have held steady in recent months.

Data from the Bureau of Economic Analysis showed that in April, car and light truck sales came in at an annualized rate of 15.7 million vehicles, down modestly from a peak rate of 16.1 million in December. In the years before the pandemic, auto sales tended to float between an annualized rate of 17 and 18 million vehicles.

“Despite lower prices, Americans don’t expect to go car shopping in high numbers anytime soon," KBB’s Sean Tucker wrote last week.

"The Conference Board Consumer Confidence Index declined 5.9% in April, as views of both the present economic situation and the near future declined. Consumer confidence was down 6.5% year over year. Plans to purchase a vehicle in the next six months declined from last month but remained higher than a year ago.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

Advertisement