Used-car sale prices fell last year as they receded from the lofty highs reached during the pandemic, Cox Automotive reported, showing that its Manheim Used Vehicle Value Index dropped 15% to 219.3, or an unadjusted 13% decrease.
Cox said it was the biggest annual decline in the series’ history, but it emphasized context puts the drop into perspective: The market is readjusting toward normalcy.
“It’s undeniable that 2022 culminates with unprecedented declines in the MUVVI, but it’s important to look at the bigger picture,” said Cox Automotive Chief Economist Jonathan Smoke in a press release.
“These last three years have been extremely volatile for the market, and these declines follow record increases. In December 2021, we were up 47% year over year. The pre-pandemic levels will likely never return, but all indicators point to reaching equilibrium in the second half of 2023.”
Cox said steep drops in wholesale auction prices come at the end of three volatile years and followed 2021’s record increases. Its forecast for 2023 shows equilibrium in the used-vehicle market, with slight new-sale increases and record retail and wholesale electric-vehicle sales.