Customers browse a used car lot in Glendale, California, February 15, 2023.
Mario Tama | Getty Images News | Getty Images
DETROIT — Used car prices fell last month for the first time since October, as gasoline prices rose amid the war in Iran.
Cox Automotive’s Manheim Used Vehicle Value Index — which tracks prices of used vehicles sold at its U.S. wholesale auctions — decreased 1.6% last month from March and increased 1.8% from the same month a year earlier.
Cox said affordability remains a major concern for buyers, leading to increased demand for older vehicles and fully electric vehicles at Manheim’s auctions.
At the end of April, gas prices were up $1.12 per gallon from a year earlier, reaching a national average of $4.30 per gallon, according to AAA. They have continued to rise since, with the national average reaching $4.56 on Thursday.
“The conflict in the Middle East has now been going on for two months, and although energy prices fell slightly in mid-April, they have accelerated upward again: gasoline prices just hit a yearly high and are up 47% since the end of February,” Jeremy Robb, chief economist at Cox Automotive, said in a statement. “These higher prices are eating up a lot of the extra money in consumers’ pockets, and currently, there is no end in sight.”
Retail prices for consumers traditionally follow the movement of wholesale prices, which Cox estimates will increase at a historically stable rate of about 2% this year. The average list price of a used vehicle was $25,390 in March, according to Cox. This represents an increase of approximately $100 from February.
The average listing price of a used electric vehicle remains more than $9,200 higher than the overall market, but new and used vehicle retailers said rapidly rising gasoline prices have led to a surge in electric vehicle sales following a slowdown after the Trump administration ended federal incentives last year.
Manheim’s electric vehicle index increased 7.2% year-over-year and 1.4% from March.
April’s price drop follows a strong spring selling season, fueled by many consumers spending higher tax refunds to buy or finance used vehicles, Cox said.