An increase in used-vehicle prices reflects a bad, but recovering economy
According to an article in Automotive News, the average wholesale price of a used vehicle in June was $10,167, which was the first time since 2008 that the monthly average price exceeded $10,000.
The chief economist at auto dealer auction house Manheim, Tom Webb, said that the wholesale used-vehicle price increases are a result of a shortage of vehicles at auto auctions in the beginning of 2009.
One industry analyst said the prices for used vehicles are rising due to “universally bad” causes: fewer retired rental cars and fewer trade-ins due to weak new-car sales.
For consumers, however, the higher prices could be an early sign of a perk in the economy. The strong price increases are also “universally good” because they give consumers more equity in their trade-ins, Webb said. Buyers and sellers of wholesale used vehicles are also benefiting from the rising prices.
Vehicles auctioned by dealers and those retired from rental fleets both declined more than 15% through June, Webb said.
"The changes, given the normal stability in this industry, were big," Webb said. "They definitely had an impact on pricing in the wholesale market."
-- Kelsey Ramos
Photo: Ken Hively, Los Angeles Times