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Wholesale used vehicle prices dropped 15.6% between January and November

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Wholesale used vehicle prices dropped 15.6% between January and November, according to data from the Manheim Used Vehicle Value Index. File Photo by Roger L. Wollenberg/UPI
Wholesale used vehicle prices dropped 15.6% between January and November, according to data from the Manheim Used Vehicle Value Index. File Photo by Roger L. Wollenberg/UPI

Dec. 7 (UPI) -- After reaching record levels earlier this year, wholesale used vehicle prices dropped to their lowest level in over a year in November.

Prices decreased by 15.6% between January and November, and are down 10.3% from last year, according to data released Wednesday by Cox Automotive from their Manheim Used Vehicle Value Index, which tracks the values of used vehicles at wholesale auctions.

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Retail sales of used vehicles declined 1% in November compared with October and were down about 10% from a year ago.

"New inventory is finally starting to build and that's producing momentum in new retail sales, but that momentum appears to be at the expense of used retail. Especially it's the traditional used car buyer that's most impacted by payment affordability," Cox chief economist Jonathan Smoke said Tuesday.

The price decrease is good news for companies and individuals currently buying wholesale vehicles, but could spell disaster for companies like Carvana, who purchased large numbers of used vehicles when prices stood at record highs.

The decrease in wholesale prices has yet to be reflected at dealerships where customers are paying 7.2% more than they were last year. Retail prices have decreased by less than half a percent since the beginning of this year.

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Consumer confidence has been rattled by runaway inflation and the increased interest rates the Federal Reserve has imposed to curtail it. Used vehicle sales are on pace to a 12% yearly decrease by the end of the year, according to Cox.

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