Used vehicle prices are projected to stabilize in 2025 after experiencing significant fluctuations in previous years before showing signs of calming down in 2024.
Cox Automotive, an auto data and logistics firm, anticipates that wholesale prices on its Manheim Used Vehicle Value Index, which monitors prices of used vehicles sold at its U.S. wholesale auctions, will conclude this year 1.4% higher than in December 2024. While pricing may vary monthly due to selling seasonality and other factors, the fluctuations are not expected to be as extreme as in past years.
The expected increase in 2025 contrasts with a 0.4% rise in 2024, which followed declines of 7% and nearly 15% in 2023 and 2022, respectively, stemming from inflated prices during the Covid-19 pandemic. During that period, index used vehicle prices surged by 46.6% in 2021 and 14.2% in 2020.
The scarcity of new vehicles due to supply chain and parts issues that disrupted production led to record-low availability. The Biden administration highlighted the surge in used vehicle pricing as a significant factor contributing to inflation during that period.
The overall price stability is advantageous for potential car buyers, although used vehicle prices remain higher than pre-pandemic levels. Retail prices for consumers typically mirror changes in wholesale prices, but in recent years, they have not decreased as rapidly as wholesale prices.
Jeremy Robb, Cox Automotive’s senior director of economic and industry insights, mentioned during a call on Wednesday that they are moving away from the pandemic-related fluctuations and may encounter some volatility in their forecast.
According to Cox data dating back to 1997, the average annual index increase is 2.3%, excluding the outlier years of 2021 and 2022. Cox also stated that the regular month-to-month index movement during the year is only 0.2%.
Cox reported that the average listing price of a used vehicle was $25,565 at the beginning of December, slightly up from $25,493 the previous month but down by 3% from a year earlier.
Used vehicle sales are projected to rise by 1% year over year to 37.8 million in 2025, as per Cox Automotive. This forecast includes 20.1 million in used vehicle retail sales, reflecting a 1.2% increase.
