Price growth is slowing. The average listing price for a used vehicle was $28,237 at the end of September, up from the revised $28,064 at the end of August. That price is only $1,686, or 6%, ahead of a year ago.  -  Graphic: Cox Automotive

Price growth is slowing. The average listing price for a used vehicle was $28,237 at the end of September, up from the revised $28,064 at the end of August. That price is only $1,686, or 6%, ahead of a year ago.

Graphic: Cox Automotive

Used-vehicle inventory and asking prices are stabilizing while used supply held steady in September from August, and is higher than a year ago, according to the Cox Automotive analysis of vAuto Available Inventory datav released Oct. 14. Meanwhile, growth in listing prices is slowing.

The total supply of unsold used vehicles on dealer lots, both franchised and independent dealers, across the U.S. stood at 2.46 million units at the close of September, about the same as the revised number at the end of August and 10% higher than September 2021.

The total days’ supply at the end of September stood at 50, compared with the revised 52 days’ supply at the end of August. Days’ supply in September was 8 days above year-ago levels. Used-vehicle inventory has been holding at about this level since mid-January.

The Cox Automotive days’ supply is based on the daily sales rate for the most recent 30-day period, in this case, ended Sept. 26. Sales were 1.48 million vehicles, compared to the revised 1.43 million at the end of August. For the month of September, Cox Automotive estimates used retail sales declined 8% from August and are down 10% from a year ago.

The average listing price for a used vehicle was $28,237 at the end of September, up from the revised $28,064 at the end of August. That price is only $1,686, or 6%, ahead of a year ago.

“It may well be that higher interest rates are beginning to hurt used-vehicle demand because consumers can’t afford the higher monthly payments,” said Charlie Chesbrough, senior economist at Cox Automotive, in a news release. “Slowing sales and building inventory could force dealers to lower prices over the next few months.”

As with new cars, the lower the price, the tighter the inventory. The days’ supply increases with every $10,000 increase in price category. Days’ supply for under $10,000 vehicles is 33. At the opposite end of the spectrum, days’ supply for vehicles over $35,000 is 65.

Also, as with new vehicles, Toyota, Subaru and Honda have the lowest days’ supply of used vehicles at about 44.

Estimated Monthly Used-Vehicle SAAR and Volume

Total used-vehicle sales in September are estimated to be near 3 million units, down 9.2% from September 2021. The seasonally adjusted annual rate, or SAAR, is estimated to have finished near 36 million, down from last September’s 39.7 million level but above August’s downwardly revised 33.3 million pace. Used retail sales were also estimated to be lower in September.

“Rising interest rates are likely taking potential buyers out of the used vehicle market," Chesbrough said. "However, limited supply in the new market is likely pushing some of these shoppers into the used market.  For the rest of this year, it is expected that sales of used vehicles will face increasing headwinds as rising interest rates lift monthly payments, and new vehicle inventory continues to recover.”

Retail used-vehicle sales — the volume of vehicles sold via a dealership, thus removing private party sales — are estimated to be down 8.4% from September 2021. The used retail sales pace ticked up to 19 million in September from August’s revised 17.5 million level.

 

 

 

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