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Used-Car Values Decline A Bit, But From A High Peak

Wholesale prices for used cars and trucks are down a bit, but “down” is a relative thing — down, relative to fairly recent record highs, and still much higher than before the COVID-19 pandemic.

The average used vehicle sold at wholesale, dealer-only auctions in November sold for $14,012, according to the latest monthly report from ADESA Auctions. That’s down 4.6% vs. a year ago, but it’s still an increase of $2,938, or 26.5%, vs. pre-pandemic November 2019, when it was $11,704, according to Tom Kontos, chief economist for ADESA Auctions.

The latest peak in the average, wholesale used auction price was $17,843, in May 2022, according to ADESA Auctions data. The company reported earlier that the average topped $16,000 for the first time in September 2021.

Part of the latest small decline in wholesale auction prices is a typical seasonal pattern, in which used values decline on average as the year goes on, bottoming out in the winter and peaking in the spring.

“Average wholesale used vehicle prices fell for the second month in a row in November and into December, which is not unusual for the year-end/holiday season period,” Kontos said in the monthly report.

“Dealers appear to be amply stocked for the softer retail demand they face,” he said.

Analysts are closely watching how much high prices and high interest rates are hurting consumer demand for autos and auto loans. Auto loan share is down, for instance, for borrowers with subprime credit. But demand is still strong among prime-risk, new-car customers.

Separately, some of the nation’s biggest new-car dealership groups report that because of high prices, they’re trying to avoid buying used cars at auctions. Instead, they’re working to “self-source” used cars.

That is, dealers try harder to buy trade-ins to resell, or buy cars “off the street,” from customers who don’t necessarily buy a car from the dealer.

This article was originally published by a www.forbes.com . Read the Original article here. .

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