According to data from the Consumer Price Index (CPI), used car prices continued to decline in July, dropping 2.3% from the previous month and 10.9% compared to the previous year. Since peaking in February 2022, used vehicle prices have fallen nearly 20%, reflecting a broader trend of normalization in the auto market after pandemic-driven inflation. New car prices also saw slight decreases, with inventories building up and contributing to lower prices across the board.
Strong Sales Persist Despite Falling Prices
Despite the downward trend in prices, automakers like Ford, GM, and Toyota have maintained strong sales, although they anticipate modest declines in average transaction prices. On the other hand, the Manheim Used Vehicle Value Index (MUVVI) saw a slight increase in July, suggesting renewed demand for used cars at the wholesale level. Analysts speculate that a smaller influx of leased vehicles into the used market could sustain this upward pressure on prices, though it remains uncertain whether this is a temporary fluctuation or a more persistent trend.