CNBC has a report citing Cox Automotive data that is offering used car buyers a potential break. Cox’s Manheim Used Vehicle Value Index decreased 1.6% in April compared with March and was up 1.8% compared with a year earlier. The average list price hit $25,390.
Gas Prices Surging
National average sits around $4.50/gallon
That’s up over $1/gallon from a year earlier
Gas prices up 47% since end of February
Driven by ongoing Iran war
How High Gas Prices Are Changing Buyer Behavior
Affordability is a major concern - high gas prices eating into consumer budgets
Increased demand for older vehicles (cheaper)
Renewed interest in electric vehicles despite higher upfront costs
Average used EV price: $9,200 higher than overall market
Used EV index up 7.2% year-over-year
Spring Selling Season
Strong start fueled by higher tax refunds
Consumers used tax money to purchase/finance used vehicles
Wholesale prices forecast to rise ~2% for the year (historically stable)
There was a significant note fromCox Automotive's chief economist Jeremy Robb, saying: "Higher [gas] prices are soaking up a lot of the extra money in consumers' pockets, and currently there's no end in sight."
Let’s hope this is in fact a peak and not a pause. Middle East uncertainty can remain so if you’re in the market for a used car, this could be a window of opportunity.
Thanks for reading everybody!
-Paul