Used-Car Prices Record Largest YoY Decline Since Financial Crisis

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by Tyler Durden
Wednesday, Oct 19, 2022 - 11:25 PM

For those who've held off on purchasing a used vehicle over the last two years while watching prices soar to astronomical levels, we have some promising news: 2023 could be the year of the "deal." 

Auction giant Manheim found that wholesale used-vehicle prices in the first 15 days of October recorded the most significant year-over-year decline of 10.4% since January 2009. 

"Used car prices are now down 10% over the past year, the largest YoY decline on record with data going back to 2009. This was a leading indicator of higher inflation rates in 2020 and the recent downturn is likely a leading indicator of lower inflation rates to come," Compound Capital Advisors Charlie Bilello tweeted

The Manheim Used Vehicle Value Index peaked in January 2022 and continues to slide through the fall, now down more than 15% from the high. 

All six types of vehicles experienced year-over-year declines. Luxury cars and SUVs saw the most significant price drops in the first 15 days of this month. 

Using Bankrate data of the average used auto loan rate inverted on a chart with year-over-year change in wholesale used-vehicle prices clearly shows that the Federal Reserve's most aggressive interest rate hikes in decades are hitting demand, which has led to a late-year cooling in prices. 

Bloomberg's Chief Economist for Financial Products, Michael McDonough, tweeted how the slide in wholesale used-vehicle prices could have potential implications for the upcoming CPI print. 

Some on Twitter said wholesale used-vehicle prices are "about to crash worse than anything we've ever seen." 

Some said, "I'm shopping for a used car rn, and prices still seem high AF." 

In April, we asked the question: "Are Used Car Prices About To Peak For Real This Time?" Followed by a note one month later titled "Used Car Prices Are Crashing At A Near Record Pace." And by August said that "Used-Car Market Cools As Prices Plunge To One Year Low." Then, weeks ago, reported "Used Car Prices Record First Annual Drop In Two Years."