Used-Car Wholesale Prices Have Given Up 53% of their Crazy Pandemic Price Spike: Historic Plunge Continued in December

Used-Car Retail Prices have given up only 36% of their price spike so far.

By Wolf Richter for WOLF STREET.

Used vehicle prices at auctions fell another 0.5% in December from November, seasonally adjusted; and by 2.0%, not seasonally adjusted, according to the Manheim Used Vehicle Value Index today. Manheim is the largest auto auction house in the US and a unit of Cox Automotive. Its auction venues sell about 5 million vehicles a year. The index is adjusted for changes in mix and mileage.

The index price, at $18,110, has dropped by $4,792, or by 20.9%, from the peak in May 2022. During the incomprehensibly crazy run-up of prices from February 2020 through May 2022, the index had soared by $8,842, or by 63%, to $22,902.

As of December, $4,792 or 53% of the $8,842 price spike has now vanished – a historic plunge, after a historically insane price spike.

Auction prices stall or drop when dealers who go there to replenish their inventory buy less, and are more skittish about bidding up prices, and would rather walk away empty-handed than overpaying, knowing that they’re facing pricing resistance among their own customers.

This all fell apart during the pandemic when dealers suddenly dealt with consumers that would pay anything for a used vehicle, instead of trying to drive a bargain. And dealers held their noses and cringed and bid up prices at auctions, knowing that they could still make huge amounts of money at those prices because consumers were just willing to pay whatever. And some of them even put their observations of this craziness on YouTube.

Most people could have just continued to drive what they already had for another year or two, causing demand to collapse enough to where dealers would have had the choice of either eating their inventory instead of their daily bread or cutting prices. But no, not in 2020 and 2021, when money was free and fell like manna from heaven, price didn’t matter, and dealers raked it in.

People who bought back in 2021 and 2022, are now driving vehicles whose values have plunged in a historic manner, in addition the normal depreciation.

The question on everyone’s mind is this: How much more will used vehicle prices drop before the price increases start all over again?

Inventories have been rising but are still fairly tight.

Used retail inventory has been rising off the lows in February and March 2023 but remains tight with 2.36 million vehicles at dealers at the end of November, compared to a range of 2.8 million to 3.0 million in 2019, according to estimates from Cox Automotive.

That’s one of the interesting aspects here: prices have been dropping despite fairly tight used vehicle inventories. It’s not like there’s a glut of vehicles on the market, but it looks like enough consumers have finally gone on buyers’ strike, and they’re staying on buyers’ strike, and that’s what it takes to bring prices back down.

Retail prices, as per CPI used vehicles, have also fallen by historic amounts, but not nearly as much: by 12.8% from the peak in July 2022, not seasonally adjusted, according to the CPI for December. By now, 36% of the pandemic spike has vanished.

Both the index for wholesale prices (top chart above) and the CPI for retail prices (chart below) surged during the spring 2023, much more than the normal uptick during the spring, after having tumbled through February 2023. This move, spread over only about four months, added to the astounding volatility of used vehicle prices over the past three years.

Wholesale prices have now fallen well below the lows of early 2023, but used-vehicle retail prices didn’t even yet make it to the lows of early 2023, and in November ticked up again:

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  136 comments for “Used-Car Wholesale Prices Have Given Up 53% of their Crazy Pandemic Price Spike: Historic Plunge Continued in December

  1. Greg Nikolic says:

    Used car lots are amazing places.

    They are the relic-sites of an entire technological civilization. Around the world, from Japan to South Korea to Europe to America, there are factories lovingly churning out cars, which are a marvel of technical dexterity. These cars get used up and then sold onto lots.

    The lots are fiercely competitive places, competing with other used car lots for your business. Unlike many industries (which are oligopolies, such as Big Tech), used car lots are repositories of egalitarian enlightenment.

    If you want to see capitalism in a nutshell, come visit your local used car lots. They’ll be glad to have you.

    • Leo says:

      First watch fake capitalism:
      1. Big tech rallied 2.2% again today, just on the news of $1.5 trillion bipartisan government funding bill.
      2. We can no longer design airframes. Instead we tweak existing frames and then ground them after “accidents”. See Max 8 and now Max 9.
      3. A 50 years ago we landed man on moon. Today, even our spacecraft fail midway (Astrobotic lunar lander). Looks like Russia is in same state. Apparently India and China have learned what we have forgotten.

      • sufferinsucatash says:

        I was much appreciative of the thousands given back after last weeks schelacking.

      • Buffalo Billion says:

        Your sartorial humor brought a smile to my tired face this morning. Thank you!

    • Cas127 says:

      I get basically what you are saying, but there is plenty of weirdness reflected in Wolf’s charts too.

      1) Interesting to see Manheim prices start rising in…2017, after long plateau. The true craziness had to wait for the pandemic, but 2017-2019 saw an upward trend after a *long* period of price stability. Interesting.

      2) Who would have guessed that a 20% Pandemic fall in inventories (from 3 million to approximately 2.4 million on average – still hefty levels) would/could trigger a *50%* hike in retail prices.

      Shows you just how much those software yield optimizers have to work with when supply is uncontrollably/controllably (see lodging prices) held off the mkt.

      So long as a magic percentage of price insensitives eagerly fling themselves into the inflationary volcano…we’re *all* f*cked.

      Detroit is eagerly investigating how it can manufacture a single car…retail price $300 billion.

      3) As hinted at, the timing of the various charts’ trend movements aren’t particularly well correlated…and are downright wacky at times.

    • sufferinsucatash says:

      No thanks I buy new to avoid this chaos and customer fleecing.

      There are some Toyota dealers in the northeast who will sell for very little profit. It’s perfect. The car needs zilch money in repairs for 7-10 years. No headaches, just press the button and drive. Dealer oil changes and minor maintenance keep them purring.

      • Harrold says:

        Same here. I’m willing to buy new because I don’t know how that used car was driven/maintained. My last one was kept for 25 years — a honda. I follow Consumer Ceports reliability and customer satisfaction ratings. Real people are reporting about their real world experiences with a car.

        Kia has risen to the top of the ratings and has a 10 year warranty.

        • Cold in the Midwest says:

          Correct Harrold. The used car dealerships always emphasize “this car has only X miles” and hope your line of inquiry will end there.

          But if the car has been drag raced or the manufacturer’s suggested service intervals were consistently ignored there will be no mention of that. Once it is in the dealership’s hands, those details are unavailable.

          My father had an interesting saying about buying a used car. He said you are “buying someone else’s troubles.”

        • Dave says:

          You are clueless

          Kia (military for “Killed In Action”) is absolute junk. Research the reports of owners NOT the bribed “consumer Reports”

          Buy new ? Pay 20% depreciation the 1st 10 minutes

          Watch real dealers on Youtube like CQA or CarEdge

          The economy is imploding. CHECK THE REPO’s. People are giving back their cars.

        • Wolf Richter says:


          “The economy is imploding. CHECK THE REPO’s. People are giving back their cars.”

          What idiotic YouTuber bullshit, every single word of it 🤣 Here are annual repos, just ticking up from the free-money lows and not even back to the Good Times levels before the pandemic (Cox Automotive):

      • joedidee says:

        NEVER EVER BUY NEW unless you make to much income
        or can write off entire sales price via income taxes
        we bought in 2021 because we needed vehicles – got several 2016
        did we over pay?? maybe – but didn’t care as we have solid vehicles with lower mileage
        my wifes after 2 years has 40k on 2016 and I have 121k on 2016 diesel
        not looking for anything for 5 more years
        besides we don’t want newer chip happy cars/trucks

        • dpy says:

          That used to be true. Nowadays the models known to be really reliable lose almost no value at all for years.l A lot of it is that most people don’t pay cash and dicker for a good retail price but take out loans and either paid too much for the car new or are willing to pay too much used, shopping for monthly payment amounts and not a simple out-the-door price. But if you are a cash buyer and buy wisely, getting a really good price for the new unit, it make no sense to pay 10% less for something with 30k miles.

        • Fast Eddie says:

          Never say never.

          Last new car I purchased was a Subaru (several years ago); as it was model year end and there was a generous cash back allowance on the car, it was actually LESS expensive than a 2 year old used version sitting on the dealer’s lot. It just depends on the make/model/year.

      • eg says:

        LOL — if you think buying new saves you from “customer fleecing” you’re just not paying attention.

      • James says:

        Push the button and start?!

        I will say have a 1981 Chevy van 4×4 and a 1985 f-150 4×4,both are built to the hills but never added a start button even with 20 g’s in each on rebuilds.

        I will look into on the next build!

        • Wolf Richter says:

          When I was about 6 years old, my uncle had a VW Beatle, and it had a start button. All old cars did for a while after the invention of the electric starter that replaced the hand crank. Two of the great innovations in automotive history were 1.) the electric starter with a pushbutton that activated it; and 2.) years later, combining that pushbutton that activated the starter with the key that locked/unlocked the ignition as anti-theft device. And then it stayed that way for decades. Now we’ve now come full circle, except we don’t have to stick the key into the steering column, we can just keep it in our pocket, or we can use the app to unlock the ignition. And the start button may be a pushbutton, or a button on a screen.

    • dang says:

      Well one’s perspective often differs from the point of view of someone else, which historically, seems to be one of the motivating factors of human innovation.

    • Mark says:

      Hot off the presses : Reuters

      “Car rental firm Hertz to sell 20,000 EVs for gas-powered vehicles”

      • Wolf Richter says:

        Good. Buy one of them. Maybe they’ll make you a deal?

        The used-car market’s inventory is a little tight. So every little thing is going to help undo the spike in used-vehicle prices, including increased supply.

        The anti-EV morons are getting hard-ons over the Hertz announcement. Which is kind of funny, when you imagine that. Hertz – the company that went bankrupt in 2020 — complained about Tesla’s price cuts, and how they have ruined its bet on constant price increases.

        Hertz had bet when it bought the cars that there would be price increases over the years that it owned the cars, and that therefore it could sell them at a high price. That’s how it used to be done.

        The automaker oligopoly has played the same coordinated game for decades: constant and big price increases to where average Americans can no longer afford new vehicles. Now Tesla comes along, refuses to be part of the oligopoly, violates the oligopoly rules (constant big price increases) with big price cuts which is the best thing that happened to American car buyers. And anti-EV morons are getting a hard-on over this? Really funny.

  2. themsicles says:

    I have always wondered if you sold an inflated asset to buy another inflated asset, does it really matter if both assets fall later?
    Assuming the run-up in stocks lead to some inflation in cars, looking at you Porsche, the deflation in both doesn’t really change anything.

    It’s rare to time things, to sell one inflated asset and dump into another deflated asset at the same time.

    So if you are sitting on an expensive purchase funded by some other inflated asset earlier in time, enjoy it. :D

    • Wolf Richter says:

      You could have sold at the peak, walked for three years, and then bought another vehicle in 2024, and pocket the difference? So maybe not.

      But you could have driven what you had for another three years, and you would saved a lot of money because you got three more years out of the vehicle that you already had, and depreciation rates decrease as the vehicle ages, and you could have earned 5% on the cash you didn’t spend on another vehicle.

      But eventually you have to buy something, and it would have been better to buy now than in 2021 or 2022.

      • Publius says:

        I was trying to wait it out, but the full size van that ran a red light at 50+ mph had other ideas in mid-2022. Can’t complain too much, I walked away from it.

        • Wolf Richter says:

          Same happened to us in September. Human driver rear-ended our car, totaled it. Wife walked away from it.

          But these kinds of forced buyers are a smallish number.

        • Lune says:

          Same thing with me. I was waiting for prices to come down further and those awful “market adjustment” shakedowns went away. Figured I could wait it out another year.

          But then I got rear-ended 2 months ago and had to brave this current market. It didn’t help that I wanted to get a Kia Telluride which is still facing big shortages. Even after negotiating hard, I still feel like I got taken for a few extra thousand dollars that I shouldn’t have had to pay, but I had no choice since we needed a car ASAP and there was no point in continuing to pay for a rental car each week.

      • Louie says:

        It seems there would be great value to your readers to have a posting regarding the distinct difference between a want and a need. Also, the distinct difference between earning a penny of interest versus paying a penny of interest. A total understanding of these two concepts would be most helpful for people who are looking for long term financial well-being. Any discussion about price and value of cars or, for that matter, stocks is just every day noise. Don’t you agree?

      • themsicles says:

        That’s fair too. From 2022 to 2023 our spending on eating out probably resumed and potentially exceeded our 2019 levels. Likely travel expenditure also. We were part of the problem there. But we definitely cut down on everything else. We’ve been humming along the same stuff around the house and vehicles for a while now. At the end of 2023, we decided to cut back on those as well. :)

        I did see many many people invest in upgrading their houses. Remodeling, replacing, refinishing or just expanding their current homes. People were building gyms in their garages as if they are never going to step out again for fitness activities.

        There was a lot of puzzling behavior. Where I thought, people will cut back – they instead completely refocused spending in other areas and going above and beyond even in the face of absurd prices.

        It’s heartening to see some semblance of normal behavior in used car market. But prices of groceries for local quality items is out of reach for daily purchase. We could see us slowly stepping up on the produce quality we would buy, that trend has reverted.

        It’ll take a few years for us to feel normal with those prices, unless inflation kicks in and puts that out of reach for good.

    • kramartini says:

      Trading down will help u keep part of the gain if both old and new assets are inflated…

  3. Concerned_guy says:

    Wondering when prices in other assets such as housing will come down (meaning fully)?

    • Phoenix_Ikki says:

      Really really really wish this will happen to housing or the trend to come but don’t hold your breath on it..we do live in such strange time. Also, you’ll probably hear people around here say price will forever stay high in SoCal like SD….time will tell.

      • Russell A Archambault says:

        Well, cars are depreciating assets, except those rare cars that are collectible. Real estate is an generally an appreciating asset, accept under unique market conditions.

        • 91B20 1stCav (AUS) says:

          RAA – I see the nature of the collectible ICE car (or ANY ‘collectible’-as recounted in earlier comments, it’s becoming difficult to even GIVE AWAY grandma’s lovingly-tended furniture and china) changing with the apparent long-term shift to industry-wide ‘EV-skateboard’ basic-spec power/chassis. Will the number of newer automotive gearheads equal in proportion and devotion the numbers who invested untold hours in divining, developing, and/or simply admiring the secrets of ICE power/chassis over a century+ paradigm, and still have an economic appreciation/desire for the mechanical performance and beauty wrapped in the best efforts of a different past?

          Not saying those examples won’t be there, but they’ll probably only be as visible, and in equivalently small numbers, as classic Bugattis, Packards or coach-in-fours are today, with similarly declining values…

          may we all find a better day.

      • andy says:

        Are there jobs in SD? Any industry or some such?

        • Matt says:

          Qualcomm headquarters. Apple built a new campus here in 2022. Lots of WFH from the Bay Area and elsewhere. Next door neighbor for example moved here during covid and works for TTWO. Quite a bit of biotech and other medical companies. Resmed, Illumina, and Dexcom. Oh, Uncle Sam is pretty big here, how could I forget?

        • KGC says:

          1159 Federal Job openings in SD as on this moment.

      • sufferinsucatash says:

        There is one near me sold in 17 ,they now want double the price. They have done very little to improve it.

        Why do they think they deserve several extra 100’s of thousands just for handing over the keys and squatting for 6 years? lol /s

    • Einhal says:

      I now believe that, while the Fed claims they’re only concerned with preventing CPI deflation, that they won’t really allow asset deflation either.

      Let’s see for starters if the March BTFP or whatever it is is renewed for another year.

      • Wolf Richter says:

        The BTFP has nothing to do with asset price inflation. The Fed did a depositor bailout and the banks collapsed, and investors lost everything. The BTFP is a liquidity measure that allows banks to borrow money from the Fed if their deposits are leaving so that these banks don’t collapse, requiring more depositor bailouts. People taking out their deposits all at once can kill a bank.

        People here in the comments said in late 2021 that the Fed will never taper QE, and after it was tapering QE, they said that the Fed will never do QT, and after it started doing QT, they said it wasn’t really QT at all, and after QT started piling up, they said the Fed is gonna start doing QE all over again as the next payroll report will be a negative print, or whatever, and then the banks failed and the liquidity measures were rolled out, and these people said, huge QE infinity is here. They said this stupid BS every step along the way and this is what actually happened:

        Sure, at some point the Fed is going to slow QT and end QT altogether. We’ve discussed this for over year. There is a minimum below which the Fed cannot take its balance sheet, and we came up with a figure of around $6 trillion.

        By the time the RRPs “approach zero,” as Dallas Fed’s Logan put it, the Fed’s assets will be at or below $7 trillion. As Logan said, at that time when RRPs are very low, it’s time to start talking about slowing QT and come up with a clearer idea as to how low the balance sheet might go.

        She also said that slowing down Qt at some point will allow the balance sheet to drain more than when they’re doing it too fast and something goes wrong:

        Normalizing the balance sheet more slowly can actually help get to a more efficient balance sheet in the long run by smoothing redistribution and reducing the likelihood that we’d have to stop prematurely.

        • SRK says:

          Today came across many articles saying Logan is talking about tapering and QT. Then read her speech on Dallas FED. Wall Street Media is completely twisting her words and content of speech. She gave very balanced speech and agreed Financial conditions have eased more than expected and it is risk for inflation. She also said discuss parameters for slowing QT. I guess its fair when ON RRP, slow down the pace so they can manage the QT better than abruptly or prematurely stopping it.

        • John H. says:


          Will you be referring to that chart above as “the Rat?!”


        • Wolf Richter says:


        • John H. says:


          Good comments. Logan recommends gradualism and data dependence based on the Fed forecasts.

          In case you missed it, this zinger in the introduction, while admirable for its truthfulness, is somewhat concerning:

          “There are, as always, plenty of risks: geopolitical threats to supply chains, financial fragilities in sectors such as commercial real estate and just the simple possibility that our forecasts are once again wrong, as they’ve been too many times in recent years.”

          You’d think 300+ PhDs on their various payrolls would lead to better predictions. Almost makes a guy speculate that maybe the complex economy can’t be foretold in advance.

          Therein, combined with the economic law of unforeseen consequences, is the base of an argument for reducing the footprint and scope of the Fed.

        • Einhal says:

          I’m not even talking about the balance sheet at this point, more the optics that “The Fed has my back.” The emergency programs like BTFP go a long way in convincing people that they should always buy stocks, no matter how stupid the valuation, because the Fed won’t let prices fall.

          Enough people believe that, and it becomes a reality.

    • MM says:

      Its plausible asset prices don’t meaningfully correct down (but don’t go up either). Rather, they bounce around in a range while inflation brings wages up to the point where price to income is more reasonable.

      • CCCB says:

        It’s not only plausible, it’s very likely that assets stay elevated. Unless we have general deflation, caused by some major calamity like a huge recession or a depression, prices will remain close to where they are.

        Could they adjust some? Sure. They already have, but 2018 prices on pretty much everything, are a thing of the past. And god forbid we should go back there, rest assured employment and pay will drop way worse.

        • Desert Rat says:

          No, we should go back to 2019 prices with a normal amount of inflation for the past three years. God forbid we DON’T have that amount of deflation. And services inflation rages on. Housing is still unaffordable. And wall street continues to push for wage price spiral, the greedy, selfish garbage that wall street is.

      • andy says:

        That, or they drop 80% like they did in Tokyo. Or something in-between.

    • American Dream says:

      Just wait until the ten year Treasury is paying 7 8 9 percent and then we’ll see some good asset deflation.

      Few more years max

      • GuessWhat says:

        Within 3 months or so, most of the reverse repo MMF will be gobbled up by treasury issuance. With $1T coming down the pike by the end of Q3, I can’t wait to see how this affects demand for treasuries. Logic holds that once these RRPO monies are soaked up that demand for treasuries may start to wane, forcing yields to rise.

        Add to this the possibility of a continued buoyant labor market and we get a realization that the Fed pivot may not arrive until later this year. I’m not sure 7%+ yields are on pace quite yet, but a move back up to 5% for the 10YT may well be possible. I agree with your 3 year assessment.

        I’ve been saying for a few years now that I think the Federal deficit becomes an issue between $35 and $40T. We’ll be at $35T by the end of Q1. $40T will arrive by the end of FY ’26 or about the time Congress is going to have to get serious about plugging the Social Security Trust Fund hole.

        Yeah, 3 years sounds about right.

      • Z33 says:

        If inflation is that high in a few years, assets will go up. Argentina’s stock market has gone up a lot as has inflation. But their stocks still don’t keep up with inflation. So in nominal terms prices will keep going up and we won’t get deflation unless you look at it in real terms. What will cause asset deflation in nominal terms are private loan defaults and needing to liquidate assets to get liquidity. If the government has loan issues and needing liquidity, they will just print and that type of loan “default” is inflationary unlike private loan issues.

        • Einhal says:

          Z33, interesting point. These days, if the federal government continues its trend of bailing everyone out, what it’s effectively doing is transferring all debt to the government balance sheet, which means that the defaults are more likely to be the inflationary type than the deflationary type you mentioned.


        • American Dream says:

          I’m thinking moderately high inflation with a massive deficit would lead to higher long term rates for at least a somewhere extended period of time to bring down assets.

          Get what you’re saying with Argentina but I don’t think the hyperinflation scenario is what we are looking at for our economy so maybe not an apple for apple example.

        • Jon says:

          Home prices are deeply tied to 10 year yield.
          If 10 year yield goes up to much higher home prices need to come down much lower.

          Since fed has effectively pivoted
          I don’t see 10 year going up a lot .

          Don’t believe me on fed pivot just look around and see what Powell said and the market reactions.

          You can’t make money in this market by being attached to fundamentals.

          Fundamental didn’t matter for last 15 or so year.

          The only game in the town is loose financial conditions to keep the party going and fed won’t be a party pooper.

        • Einhal says:

          Jon, the salient question is how long is the Fed and Congress able to keep this “game” alive? Obviously, there is no free lunch, so the game does have an end point. Just nobody knows when it is.

        • MM says:

          “Since fed has effectively pivoted
          I don’t see 10 year going up a lot .”

          Hard disagree. The 10-year bottomed last month and will go back up.

          “You can’t make money in this market by being attached to fundamentals.”

          If you really believe this fed pivot fantasy, buy some TLT. You’ll make lots of money if rates really do go down.

      • Flea says:

        12-18 Months,you will see deflation look at 18.6 year cycle .its on internet good luck be wise

        • JD says:

          “It’s on the Internet”.

          Next to the pizzagate and UFO reptilian vids. A wonderful collection of BS to fit your personal level of dysfunction/stupidity.

        • Concerned_guy says:

          can you elaborate a bit?

    • Depth Charge says:

      They printed everything higher permanently. All by design. Of course, the assets didn’t really become more valuable, the fiat currency just became more worthless. They stole the fruits of the working class and the poors’ labor to park it in the bank accounts of the wealthy, while simultaneously stealing the future standard of living of the young. END THE FED.

  4. Phoenix_Ikki says:

    Guess we will have to see how these wholesale price will eventually affect dealer advertised price on some used cars. I am still seeing nutty prices for 2-3 years old Corvette C8 3LT and pretty much most of the Porsche 911 and Cayman GTS and above. Kind of remains me of existing home sellers still trying to offload their house in 2021/2022 pricing.

    • ApartmentInvestor says:

      @Phoenix_Ikki dealers are “still” getting crazy Additional Dealer Markup on 911s and C8s (and asking for $50-$100K ADM on GT4s and GT3s) last year I saw a GT3 Touring for sale with $150K ADM added to the MSRP so many of the “nutty prices” are actually 1/2 what the guys paid for the cars 2-3 years ago (at peak Covid/peak ADM). While it is fun to track the high end Porsche and Corvette market the current sale prices of 992s and C8s is not really related to the “overall used car market” just like the market for lakefront property in Tahoe or beachfront property in Malibu is not really related to the “overall residential real estate market”.

  5. Bill b says:

    I just bought a 2019 truck with 28000 miles. While sifting through the old paperwork I see I only paid $1,000 less than the original buyer did new five years ago. Crazy money. It’s a second truck for me bought for a specific purpose, a bit of remote travel so I need 4wd. I’m sure waiting a year or two would have been better financially but at my age I have less time than money so it made sense in my circumstance. I can say from personal experience the particular RV market I am dealing with is crashing back to reality in a big way. Fortunately I did ok with the latest RV acquisition. Ok but not great. People are still trying to get more than new prices for five and ten year old Casitas but it’s not happening anymore.

    • Bs ini says:

      Interesting about the RV business stealing from the used car business chat. A big lot with little competition in Tyler Texas folded last week and lot is empty . Many of these have lots all over so the inventory would just move

      • Cas127 says:

        Elkhart, IN, center of the US RV manufacturing universe, was one of the handful of metros (per BLS) that saw substantial net job losses last year (2023).

        As with housing (existing sales volume down 30%-50%), normalized interest rates reintroduce buyers (and, eventually, valuations) to the reality behind the ZIRP.

        So demand evaporates…with prices to follow.

        • Wolf Richter says:

          RV manufacturing went through a boom as everyone was buying RVs to tool around in during the lockdowns, and then people went back to work, took planes to go on vacations, slept in hotels again, etc., and RV sales tanked from the boom, and production had to be cut. One of the many peculiar pandemic phenomena.

          In 2020 through 2022 about 300,000 more RVs than maybe normally would have been shipped. Now it’s hangover time. RV Shipments:

          2019: 406,070
          2020: 430,412
          2021: 600,240
          2022: 493,268
          2023: 291,600

        • Nemo300BLK says:

          As you know, the area around Elkhardt isn’t just RVs but boats as well. I own a Barletta tritoon manufactured in Bristol and toured the original plant in 2019.

          The wife and I are attending the Atlanta Boat Show this weekend, which should be interesting because we haven’t been since the inflation era began. I can’t wait to see the advertised monthly payments at 7.9% for 20 years on a $300K wakeboard boat.

          On the way home, we will stop at an Audi dealer because I want to see an R6 Avant in real life. It will be interesting to see what energy a new German car dealer has on a Saturday afternoon in January during in a high(er) interest rate market.

        • Warren G. Harding says:

          RVs have also gotten extremely pricey.

    • andy says:

      5-year old truck for $1K under MSRP is pretty good deal. Is this Canadian money we’re talking about?

      • Depth Charge says:

        That’s a HORRIBLE deal. What are you smoking?

        • Bill b says:

          Well it wasn’t $1,000 under MSRP. This is a Nissan and it was 2019. There was a $3,500 rebate going on so I paid $4,500 under 2019 MSRP. Good or bad deal is debateable. I have things to do in life more important to me that getting a screaming deal.

        • andy says:

          I was trying to be nice. I did Canadian money in place of /s.

  6. Doctor_ECE_Prof says:

    “t’s not like there’s a glut of vehicles on the market, but it looks like enough consumers have finally gone on buyers’ strike”
    Or the free money is gone and that free money made people buy earlier than they would normally have done.
    Politicians actions, laws lead to more side effects and they don’t have time to consider those.

    • Depth Charge says:

      That’s the thing – people will hang themselves with as much financial rope as you give them.

      Banks started going 170% loan to value on automobiles. In what world is that sane? It’s not. They greeded out, and drove the inflation with that subprime lending.

      Now those loans are gone, and magically so are the customers. Banks and bankers are the scourge of the planet.

      • dang says:

        In what world is that sane?

        I would ask you, in what world is it not sane. I mean come on, you, rightly are pointing out the obvious, aristocracy vig, that makes a mockery of our political attempts to maintain an egalitarian society which is not compatible with royalty.

        The sins of yesterday often are the root of today’s sins. The question I have are we still under the economic lunacy of Ben ” throw it against the wall and see if it sticks”, Bernanke.

        An economic plan is similar to a game plan.

  7. Shiloh1 says:

    A lot of no-shows for brands at the Chicago Auto Show next month. 50 years ago the models were really something to see and get close to, some of the cars, too.

    • jon says:

      In this age of hit tech media and technology outreach, these shows have really lost lot of value.

      Nothing surprising here.

    • Phoenix_Ikki says:

      This has been the trend for years even before Covid and the car market going nuts. LA auto show has been sucking for the last part of the decade. I remember Ferrari used to show up every year, then they disappeared and many more followed. Last 3 years, even lowly BMW don’t bother anymore. I think most automobile mfg figured out the ROI on these consumer shows are just not there and they are getting more and more expensive for the manufacturer.

      This kind of stuff been going on for the watch industry as well. Baselworld and SIHH used to be the biggest events for all the watch makers and now both went the way of the Dodo bird…

      • Random guy 62 says:

        I hope that’s the trend for truck shows too. After a decade of running our company’s presence at them I would be elated to never attend another. We scramble to show off our latest product to a bunch of FOWGs (fat old white guys as we call them) who don’t really care about anything other than the steak dinner and cocktails they get to slam on their three nights away from the wife. I’m amazed trade shows have held on as long as they have in the internet age. They’re an old concept that needs to die. Such a massive waste of resources to achieve very little. Don’t even get me started on the downright mob extortion of setup and material handling labor. As a manufacturer expected to “bring it” in hopes for proving relevance to the market, I absolutely DESPISE trade shows. Everything about them makes me quiver with disgust.

        • dougzero says:

          Having stood in a nominal 10×10 booth with a frozen fake smile way too much, I agree RG62.

        • Sean Shasta says:

          @RG62: I agree with you on trade shows as far as they are on commodity products with clear specs. For more complex products, they are highly valuable due to talks, workshops, sharing information, and the opportunity to build strong customer relationships.

    • dang says:

      The 67 vet was a work of art.

  8. Mil says:

    Curious what your thoughts are on an item like a used vehicle being taxed over and over. First tax paid in full as a new vehicle, then multiple times over its life as a used vehicle. I can’t think of many other used retail goods that are paying a tax burden over and over. Yes housing and property taxes, property sales, investment gains, but used retail goods?

    I wonder how this system ever started. Seems like an undue tax burden on an item that tax has already been collected.

    Thank you in advance for your wonderful blog and insight into the financial world, I have learned a ton.

    • Wolf Richter says:

      You pay a tax on the vehicle every year, like property taxes.

      I tell you, of all the taxes we pay, the couple of hundred bucks I pay to the DMV per year are just a drop in the bucket. And there is deflation in those fees as they go down every year that you own the same vehicle, unlike any of our other taxes.

      • ApartmentInvestor says:

        I think that @Mil was asking about car buyers paying “sales” tax on the car multiple times. Like Mil I can’t think of any other things where the government get a 10% “sales” tax (over 50 cities in CA have a 10% or higher sales tax) every time the item sells (the guy that buys my mountain bike when I sell it won’t give the state of CA over $1K in sales tax like I did when I bought it new). The Lotus Elise and Exige are fun cars, but not real practical and many have had 5-10 different owners over the last 10-20 years with the government taking in a huge amount of sales tax on each sale.

        • rojogrande says:

          The tax is on “sales,” not the vehicle specifically. That’s why the tax applies to each subsequent sale of the vehicle. Technically all sales (including the resale of your bike) are subject to the sales tax unless an exemption applies. In California for example, one exemption is specifically for garage sales that are not part of an ongoing business. Most items sold used don’t have enough value for the state to set up the administration necessary to collect sales taxes on those transactions. Cars and vehicles that need to be registered with the state are unique in that they are often high value sales and the state has easy access to the terms of the transactions through the DMV.

          If you think of it as a tax on the sale rather than the vehicle, the system makes sense (particularly from the government’s revenue generation perspective). The system could be different of course, but then it would be a vehicle tax and not a sales tax.

        • HowNow says:

          Other industries that sell used goods, e.g. used books at college bookstores, charge normal sales tax.

    • eg says:

      Um, that tax is on the transaction, not the object, Mil.

      • Anthony A says:

        Um…why not sales tax on the sale of a house then?

        • Wolf Richter says:

          They’re called “transfer taxes” and they’re common in many jurisdiction.

        • rojogrande says:

          Sales tax laws apply to tangible personal property, often with exemptions that vary by state. For example, unprepared food and/or medications may not be subject to sales taxes in some states. A house is real property and therefore not subject to sales taxes. Houses may be subject to a variety of other taxes including transfer taxes noted by Wolf.

      • Wolf Richter says:

        Governments need to raise taxes somehow. So the question is how do you spread it? So you can tax profit margins in various ways, from business income taxes to tariffs; and you can tax objects, such as with property taxes. And you can tax personal income. You can tax consumption (sales taxes, fuel taxes, sin taxes). You can tax transfers of property (transfer taxes). You can levy fees of all kinds, such as the DMV fees. You can ticket people for parking violations, which is a big revenue center in many municipalities.

        • Debt-Free-Bubba says:

          Howdy Lone Wolf. Do you really believe this?

          “Governments need to raise taxes somehow. So the question is how do you spread it? “

        • Wolf Richter says:

          LOL, yes. Was that a trick question? Unless you live all by yourself out in the wilderness and feed yourself from hunting and gathering, you’re constantly relying on public services, public safety, roads, other infrastructure, tap water, garbage removal, air traffic controllers, national defense; the safety of your water and food; a functional legal system to settle disputes and enforce laws; the safety of your healthcare products and services; the list goes on and on; even Social Security and Medicare. You just don’t want to pay for them? Is that your problem? You just want to get everything for free?

          Humans have always organized themselves into some sort of groups to help their survival in a hostile world. And pretty soon they decided that some things were the role of the community overall, and some things would be done by individuals. Larger society formed, and they decided how these roles are divvied up and paid for.

          I don’t like paying taxes either, and I try to minimize them the way tax codes allow me to. But that’s the price I’m willing to pay to live in this society. I’m doing my part to move it along. Our tax load in this country isn’t nearly as high as in other places. I just don’t want my tax dollars to get wasted, or used to buy votes, etc. But then, I’m just one person, and not a dictator, and I cannot impose my will. And that’s a good thing.

        • Andrew P says:

          Debt-Free-Bubba, I’m also curious whether this is a trick question or what you meant by it.

          Do you dispute that governments need to raise taxes to fund their activities (because of MMT, or because they could be profit centers somehow, or…?)? Or that governments don’t need to operate at all, or should be operating at a far-reduced capacity? Or that there’s an obvious/natural way to spread the tax burden rather than taxing sales?

    • Z33 says:

      Arizona does not charge sales tax on private party car sales. How the dealerships didn’t get that changed is beyond me. Oregon has no sales tax on car purchases (or anything), which is nice, too. So there are options for those of you in California that want to live west coast, but want a car and not deal with those taxes (and the areas of OR and AZ outside major cities have no emissions checks that is helpful on cars with OBD2 error codes even if literal emissions okay).

      It’s nice to see wholesale used car prices going down, but I’d like to see parts prices go down as well. I only see them going up still.

      • SoCalBeachDude says:

        Any and every resident of California must always pay use tax on any car purchased and brought into the state and that use tax is equivalent to the current sales tax rate here. The CA resident never pays any sales taxes on vehicles in other states as long as that vehicle is brought into the State of California.

    • Flaming Anarchist says:

      Here in British Columbia Canada tax on a used vehicle is 12.5%. It’s common for sellers to provide a lower price receipt than what the buyer paid to evade some tax. I paid about $4k Canadian on a 2 year old used Tacoma.

  9. WJack says:

    Please advise if this index is based on the price change for cars sold with the same make. Model and year so that apples are compared to apples. The case Schiller house price index compares the same house sold and does not compare different houses sold to make sure the price change is not the result of people buying more expensive houses. Given the enormous increase in used car prices in the chart shown, it begs the question did people buy traditionally more expensive used cars and that is part of this story. COVID created many distortions and so I am very careful when evaluating historical comparisons that include this period. We know about the shortage of new cars due to chip shortages, but we need to check this issue out before coming to a conclusion.

  10. Nick Kelly says:

    Does anyone have thoughts on why the used car price spike is related to the pandemic? I don’t see a reason for the correlation. It’s not as though a bunch of used cars disappeared re the disease.

    • ApartmentInvestor says:

      @Nick when the pandemic shut everything down most people ended up with a lot more cash since they didn’t have commute expenses, eating lunch at work expenses, dining out expenses, vacation expenses, could not buy tickets to concerts or sporting events and to top it off the government sent most people checks in the mail so with so many more people with the cash to buy a new and used car the demand was bigger than the supply (in 2021 most new and used car lots passed in N Cal had WAY less than half the typical number of cars on them). The super low interest rates of 2021 and 2022 just increased the demand even more…

    • Sean Shasta says:

      @Nick Kelly. Paraphrasing the old saying – A Rising Tide Lifts All Boats:

      Rising Money Printing Lifts All Prices. Everything went up due to the excessive money printing and QE by the Fed during the pandemic. And we still haven’t gotten back to ground level after so many interest rate hikes and partial QT.

      To get things back to even keel, I hope this reflects in the upcoming inflation numbers and forces the Fed to stay strong and go with “higher for longer” which they committed to last year.

    • eg says:

      On the demand side a lot of people abandoned public transit, and on the supply side car manufacturers screwed up their chip buying which in turn cratered their production of new cars.

      More demand meets less supply — you know the rest …

    • Rob B. says:


      Many new cars were not available due to supply chain issues caused or exacerbated by the pandemic. Remember all the new trucks sitting in giant lots waiting for a handful of microprocessors? That’s one example.

      Many would be new car buyers then became buyers of newish used cars. That effect trickled down to from recent year vehicles to older and older cars eating up the supply of used cars. Eventually you had people paying stupid prices for cars which were a decade old.

      • Nick Kelly says:

        I had forgotten about the chip shortage. The phone makers and tablets etc. got preference. Higher profit in phones might be a factor.

        • Warren G. Harding says:

          Auto manufacturers completely misjudged the pandemic and canceled their orders. Chip manufacturers found new customers.

    • Guerre de nom says:

      Wolf has talked before about how rental car companies provide a major source of used cRs, and during COVID those rental companies slashed orders as their fleets saw massive reductions in demand.

  11. Bhanu says:

    Is there any way to get separate data for used EVs and used ICE cars?

    • Prof. Emeritus says:

      While it would likely be technically possible to filter for electric cars, you’d then have the budget-EV Nissan Leaf, the techy-Tesla and a bunch of luxury electric SUVs in the same bracket. I guess of theese Teslas probably have enough transactions to be representative of the brand, but something like the Leaf might be better comparable with ICE hatchbacks (i.e. Corolla) if you want to show only the ICE-EV price spread without any effect of brand preception.

  12. Fomo buyer says:

    We had to buy a used car in late 2022 because the previous one was totaled and a car was necessary to commute to work (no option to wait). We were able to bargain and reduce the label price about $1K though. I guess now the situation might be better.

    In a normal economy, the consumers who can wait should be rewarded. But the psychology changed dramatically in today’s inflationary economy.

  13. TerraHawk says:

    About 6 months ago, I negotiated the price of a new vehicle in advance. MSRP was $64k and I was offering $54k. When I got to the dealership, there was a “mistake” and they could not give me the quoted price, so I left.
    Yesterday, I saw that the same vehicle (verified by VIN #) was being offered for $48k. I would like to get it but I don’t want to give them my business.

  14. Steve says:

    R.I.P. used car dealers. I know firsthand. You just might ne next.

  15. RickV says:

    I’ve been looking at Prius Prime hybrid plugins. Back in ‘22 all my local dealers had $5,000 dealer adjustment to the MSRP. Today, the local dealers only have top of the line XSE models on the lot, plus a $3-5,000 dealer adjustment for around $46,000. Only one dealer advertised a base SE model with a $3,000 adjustment for $37,478 about the same price as in “22, and it isn’t on the dealers lot, it’s In Transit. So some models are still at the top of their price curve.

    • Wolf Richter says:

      You’re talking about new vehicle retail prices. New vehicle retail prices overall have come down only a tad, prices of some models have come down, but others have gone up, and overall, there has been just a slight decline over the past 12 months.

      On Thursday, we’ll get the CPI data, and always pay special attention to the new and used vehicle CPIs, including charts.

  16. Desert Rat says:

    But wait, my local Honda dealer said my 2016 is worth a lot of money now so I should consider selling it to them. Lol. They call every couple of weeks. Not interested in selling, think new car prices are absurd, and really not liking the new models anyhow, meh! I’m on a buyer’s strike on everything but necessities. Hoarding my money. I’ve had it.

    • Debt-Free-Bubba says:

      Howdy Desert Rat. Debt Free is only way to be. Then purchase what you want when you want it. Good for you……….

    • Wolf Richter says:

      You want to piss off your Honda dealer: Go try to sell it to them outright and not buy anything new (tell them you already made a deal on a Ford). Video that conversation and put it on YouTube for insta-fame, LOL

    • MM says:

      Last year the local Honda dealership was bugging the spouse to trade in her 2019 HRV. They offered a gift card just to bring the car in for appraisal.

      While there, the salesperson tried to sell her a 2022 HRV, which was exactly the same car. The selling point was “it has fewer miles” but that was it.

      Needless to say, she said thank you but no thank you.

  17. Kracow says:

    If you thought the normal car market was crazy the exotic and sportscar market was silly. Sold 3 cars between late 2021 and mid 2022. Glad I did…..

    One of my cars was resold on BAT for a 45k loss near the end of 2023 on one of the auction sites.

    It was like hot potatoe but some folks going to get burned.

  18. Farmer says:

    “This all fell apart during the pandemic when dealers suddenly dealt with consumers that would pay anything for a used vehicle, instead of trying to drive a bargain.”

    No one in my world wants these supposed tech heavy ‘bargain’ cars. You’ve got dozens of new sensors that need to be replaced, software that needs to be updated.

    Since most people will never use the self-driving/ assisted driving nonsense it is a waste of money. A new car will cause most people more money in the long run when all those senors start breaking or you get into an accident (insurance only pays for 75% of vehicle price for older vehicles. You hit that very quickly with the new tech.)

    Quality is being taken out from the car ‘skeleton’ and put into unecessary tech. Not to mention the entertainment system. And of course you will probably have to go to a dealership to fix your car tech, so thats pricey.

  19. dang says:

    Great article, actually.

    The totality suggests that the ultimate winners will be most likely the Asian car companies, dedicated to quality first.

    American car companies seem to be confined by a legacy of entitlement.

  20. Swamp Creature says:

    These new cars suck. I rented a Nissan Kicks for a week and I got a headache dealing with all the warning lights and buzzers. The most annoying car I’ve ever driven. Couldn’t wait to turn it back in. Give me an old Nissan Sentra or Toyota Corolla. Simple to drive and to repair and much cheaper to buy new or used.

    • dang says:

      Correct me if I’m wrong, but hasn’t Nissan been suggested by the mainstream new car purchases, as a defunct brand. If what you claim is half true, there seems to be a quality problem with Nissan manufacturing.

      The old Corolla conjures up 50 year old memories of driving one, long past on it’s last legs, riddled with bullet holes. Started immediately at 45 degrees below zero.

      • 91B20 1stCav (AUS) says:

        dang – a purely apocryphal take re: Nissan’s woes related to me some years ago by a acquaintance who owned an independent Nissan repair shop, was that sometime in the ’80’s Nissan management was trying to figure out why they weren’t growing US market share, given their high customer-satisfaction numbers. The conclusion was that their customers were too-happy because their cars were high-quality, and were keeping them longer between purchases than the every-three-year norm of the time, so QA/QC was downgraded, reflected by what he was seeing in his shop’s trade (…always had trouble buying this explanation. Mebbe Nissan was initially too early to the more contemporary 10++ year auto product life party…or, it coulda been corporate insistence on dropping the well-known ‘Datsun’ moniker initially used in the US market, causing a long-term consumer tail of confusion/reluctance…).

        may we all find a better day.

  21. dang says:

    The preowned market is truly, the closest thing we have to a free, open outcry market. From my experience from growing up in America.

    Like most people, used cars are the only thing I could have afforded during the most romantic eras.

    Buying a new car is different market.

  22. Swamp Creature says:

    Where are the Mitzubushi cars manufactured and assembled? I just bought one. The sales dude said the parts were all from Japan and the car was assembled in the USA.

  23. BH says:

    This is more of a retail anecdote, but I just sold my 2011 Tacoma to Carvana this week. The blue book value was somewhere between 14k-16.5k; Carvana offered me 15k. I checked a couple of competitors such as Vroom and Edmunds and they both only offered me 11k. I drove down to the local Toyota dealership and asked to see if they would appraise it, but they didn’t even want to provide an offer. (They said they were getting a bunch of trade-ins from new model purchases. I’m not buying a new vehicle – I’m sure they would have hopped all over it if I was doing a trade-in)

    I know Carvana has taken a massive wallop in their stock price, but seems like they still have some cash sitting around to burn if they can offer that high into the blue book range.

    During the early years of the pandemic I wasn’t looking to sell my vehicle, (I’m only even selling it now because I’m transitioning to living outside of the US) but I’m curious how much more demand there would have been from dealers then to do a direct purchase, and how much more it could have been.

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