Wholesale pre-owned vehicle prices witnessed a decrease in April for the first time in 2023 due to increased production of new cars and trucks by automakers. On Friday, Cox Automotive reported a 3% drop in the Manheim Used Vehicle Value Index from March to April, although the index remains higher than historical norms.

The index, which monitors vehicles sold at U.S. wholesale auctions, has increased by 5.2% since December but is down 4.4% compared to April 2022.

Chris Frey, Cox's Senior Manager of Economic and Industry Insights, said in a statement that there had been eight consecutive months of year-over-year declines, averaging 8.3%. He added that this trend might not be over yet. Since the beginning of the COVID-19 pandemic, used vehicle prices have been high, as the global health crisis and supply chain disruptions led to sporadic production shutdowns of new vehicles. This resulted in a low supply of new vehicles and record-high prices, with strong demand. The high costs and limited inventory prompted consumers to purchase pre-owned vehicles, driving their prices up as well.

A continued decrease in prices might lead to more affordable used vehicles for buyers, as retail prices usually follow wholesale price trends. According to Cox, the average listed price for a used vehicle in February was $26,086, a slight drop from January.

Charlie Chesbrough, Cox's Senior Economist, commented that although prices have been decreasing, the limited supply might still offer some price support. He added that used vehicle prices could continue to fall, but a substantial decline is unlikely due to the current supply situation.

The Biden administration and investors have been closely monitoring used vehicle prices as an indicator of inflation easing. The administration had previously attributed much of the country's rising inflation rates to the used vehicle market.