Wholesale used vehicle prices were up 2.01% month-over-month in August, according to Manheim’s August Used Vehicle Value Index report.
Manheim noted that this increase in wholesale price is an abnormal for this time of year, as higher depreciation is normally expected toward the end of summer.
On a segment level, compact cars and mid-size cars experienced the biggest gains in price during August. A big reason for the segment’s success is its comparative affordability to other segments; consumers looking for a vehicle at a low entry cost are seeing a lot of value out of these segments. Meanwhile, vans, utility vehicles, and pickups underperformed the overall market through the month.
“The strange summer price appreciation in used cars is partly a function of a strong economy at its peak, with mounting affordability challenges for the consumer that favor growth in sued vehicle sales at the expense of new,” noted August’s Index report. “These conditions have supported strong used vehicle prices for over a year.”
The looming threat of import tariffs are surprisingly helping out used car prices, as consumers fearful that tariffs might raise the cost of a used vehicle in the future are buying vehicles now to beat the possible tariffs. Similarly, the fear of rising interest rates is also accelerating vehicle purchases.
These factors — plus a flattening wholesale supply that has not been able to meet demand — have allowed vehicles currently available in the market to warrant higher prices at auction.