Wholesale used vehicle prices saw a significant increase throughout the first half of April. According to Cox Automotive’s Manheim Used Vehicle Value Index, the mid-month value hit 207.1, representing a 4.3 percent increase compared to April 2024. On a non-adjusted basis, prices were up 2.7 percent month-over-month and 3.7 percent year-over-year.
This increase is largely attributed to import tariffs on new vehicles, which continue to impact the market in a variety of ways. However, there’s an indication that the momentum from tariffs may have peaked, as pricing trends showed slower appreciation in the second week of April compared to the first.
“Wholesale markets were not as strong as usual in March, but they turned on a dime the last week of the month and into early April as tariffs were implemented,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive. “In the first two weeks of April, we’ve seen much stronger sales conversion and pricing trends at Manheim, as dealers look to replenish inventory on the back of higher used retail demand.”
Price Changes Across Vehicle Segments
While the overall market saw a notable increase, the impact varied by segment. SUVs performed the best, with a seasonally adjusted year-over-year increase of 5.1 percent. Luxury vehicles were the only other segment to outperform the industry average with prices increasing 4.7 percent. Trucks and mid-size cars both experienced more modest increases of 2.3 percent and 0.9 percent respectively. Compact cars were the only segment to decline, falling 0.8 percent.
Month over month, all segments saw some growth, but only one segment outperformed the adjusted industry average of 2.2 percent. Mid-size cars managed to do just a bit better with a 2.3 percent increase. Otherwise, SUVs gained 2.0 percent, trucks 1.9 percent, and compact cars 1.5 percent. Interestingly, the luxury segment, despite strong year-over-year numbers, showed the smallest month-over-month rise, climbing just 0.2 percent from March.
Electric vehicles (EVs) were also up, although their increases were far behind the broader market. EV prices increased 0.6 percent year over year and 1.2 percent month over month. In addition, EVs now make up over three percent of all vehicles in the Manheim Used Vehicle Value Index for the first time, marking a significant milestone.
Wholesale Supply and Consumer Sentiment Both Take a Dip
Wholesale supply is tightening, with inventory levels continuing to drop slightly. Supply at the end of March stood at 23 days, a three day drop from February, and then fell to 22 days by mid-April. This is two days fewer compared to the same time last year and a continued trend of limited supply. With supply constraints persisting, both dealers and buyers will need to act quickly and strategically to capitalize on available inventory.
Meanwhile, as prices climb and inventory shrinks, consumer confidence is seeing a decline. The University of Michigan’s Consumer Sentiment Index fell to 50.8 in April, down 10.9 percent from the previous month and 34.2 percent year over year. This marks the lowest level since June 2022 and the sharpest three-month decline since the 1990 recession.
The uncertainty of the current market has had a large impact as policy continues to change on an almost weekly basis. Consumer inflation expectations rose to 6.7 percent for the next year and their views of buying conditions for vehicles sharply declined. Uneasy consumer sentiment may create future headwinds for the entire vehicle market, especially if prices continue to rise.
“Valuation trends are likely to stay elevated through Q2 relative to normal, but appreciation trends in the second week of the month were not quite as strong as the first, so the frenzy could already have peaked,” said Robb. “With the volatility in the financial markets, it’s not surprising to see some impact on the consumer’s appetite.”
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