By on October 6, 2018

We’ve discussed the issues facing used vehicle buyers a fair bit in the recent past, but September data shows the market’s quickly rising prices did not cool off with the arrival of autumn. Wholesale used vehicle prices continued to climb, with the Manheim Used Vehicle Value Index reaching its highest point in history.

Breaking down the numbers, it appears used car shoppers with the least amount of money to spend are seeing the greatest increases in price. It’s a cruel world out there.

According to Cox Automotive, the Manheim index rose 3.7 percent last month, year over year. Starting in the middle of June, an “abnormal summer bounce” pushed used vehicle prices higher, and a recent uptick in depreciation hasn’t exactly left a raft of smoking deals in its wake. The price of an average 3-year-old vehicle is still 4.5 percent higher than if normal depreciation had occured.

Manheim Consulting says its index rose to 139.9 in June, marking the third straight month of record used vehicle values. Depending on what you were in the market for, you either paid close to the normal amount, on average, or way more. Of all vehicle classes, luxury cars showed the smallest year-over-year increase in price (0.1 percent). Van pricing increased the second least, at 1.2 percent.

It’s in the more popular categories that buyers had to dig deeper. Value-holding pickups and SUVs/crossovers increased by 2.4 percent and 2.7 percent, respectively, as the amount of content being flung at new models knows no bounds. As new vehicle volume grows in these categories, it’s pushing the average price of used vehicles ever higher.

Unfortunately for the thrifty used vehicle buyer, a number of factors made September, and in fact this entire summer, a bad time to go searching for an economical compact or midsize sedan. New car buyers don’t want ’em, but it’s the opposite situation in the used market.

“This year, the abnormal rise in value seems to be mostly man-made, driven primarily by consumer demand, rising interest rates, and threats of tariffs,” said Jonathan Smoke, chief economist for Cox Automotive. “Consumers and dealers alike had reason to believe the cost of buying a vehicle would be more expensive later in the year, so there was a strong sense of urgency and ‘buy now’ mentality in both new and used.”

The steady collapse of the passenger car market means fewer sedans heading to auction at the same time consumers are entering the used market in search of a less-expensive option. Last month, midsize sedans on the used market rose 4.4 percent in price, year over year. Compact cars handily outstripped the rest, with an average price 7.1 percent higher than a year before.

[Image: General Motors]

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50 Comments on “September Was Not a Great Month for Used Car Shoppers...”


  • avatar
    Vulpine

    Sounds to me like this could lead to a fresh round of predatory lending, such as we saw back before ’08. I do know that it’s getting to the point that buying new with an 8-year note is becoming cheaper than buying used with a 4-year note.

    • 0 avatar
      Luke42

      Don’t forget that Trump & Friends started dismantling the Consumer Financial Protection Bureau last year.

      Their creation was basically a response to predatory lending circa 2008. But, since Obama and Warren set it up, the CPFB had to go.

      • 0 avatar
        chuckrs

        The latest I heard, as of June, the CFPB was declared unconstitutional. Obama and Warren half-a**ed its creation. Originally Dodd-Frank envisioned oversight by a non-political 5 member commission. Instead, O and W decided on a single autocrat to head it. So its probably off to the Supremes.

        • 0 avatar
          Luke42

          And the predatory lending continues…

          • 0 avatar
            Luke42

            So how do you suggest we mitigate the problem of predatory lending, chuckrs?

          • 0 avatar
            ToddAtlasF1

            Throw out OBAMA’s CAFE scheme, so affordable cars go back into production. Get rid of the teachers’ unions too. Predatory lending only works when people don’t learn math in school.

          • 0 avatar
            Vulpine

            “Predatory lending only works when people don’t learn math in school.”

            — False. Predatory lending works because people want something for nothing. They’re given the chance to buy something they want and are sold on loans they know they can’t afford but think they can–before they find out all the fine print. Predatory lending is a pure con job, which is why there were regulations in place to stop it. NOW, those regulations have been revoked by our government so that the rich can get richer and the poor will get poorer.

        • 0 avatar
          Lorenzo

          Yup. It was so badly written that when Senator Warren demanded answers from the single autocrat running it, he told her he didn’t have to answer to her, or Congress. And he was right.

          It’s unlikely that SCOTUS would rule on it. The lower court already ruled it unconstitutional, and neither the White House nor Justice will appeal. Trump will just order it shut down to comply with the court ruling. Nobody in Washington likes agencies that can flip them off.

  • avatar
    deanst

    This reminds me of the old joke – how do you know an economist has a sense of humour? They use decimal points. Given the ever changing mix of vehicles coming to market, I am sceptical about drawing any conclusions from short term data. Taking advice from an economist is always questionable, but taking advice from a paid shill of the industry makes no sense at all.

    • 0 avatar
      Luke42

      I’ve observed that taking your reasoning to a logical extreme ends with us creating trade wars with our closest business partners. Trade wars are, of course, bad for both businesses and the economy.

      By all means take what economists say with a grain of salt. Don’t blindly follow them, but take the time to understand what they’re really saying and the context from which they speak.

      Doing so will help you make better decisions.

      • 0 avatar
        Big Al from Oz

        Luke42,
        A very good comment. Most of what economist state is based on the facts in front of them, sort of like being a boss and one of your managers comes up and has a discussion. His information will be biased towards whatever his opinions and outcomes seek.

        Yup, read the numbers and then analyse deeper yourself to find gaps.

      • 0 avatar
        deanst

        CPI data for September now shows that used car prices were DOWN 3% for the month.

        Not really sure what you meant by your comment, but economists are human, and interpretation is part art and part science. Even if you assume no biases (which is unlikely), their comments can be considered educated guesses at best. For every economist comment in one direction, I could show you a comment giving a 180 degree different opinion.

        Realistically, it would be rare for an economist hired by (for example) the real estate board to proclaim – prices are going down! Don’t buy anything now and wait until they collapse by 30%!

  • avatar
    Lie2me

    Now more then ever the best used car buy is the car with the highest depreciation, the lowest cost to own and the one that closest suits your needs

    • 0 avatar
      jfb43

      Low cost to own and high depreciation don’t usually go together. Low cost to own implies quality, reliability, cheap and plentiful parts, and efficiency. All the highly depreciated cars that I can think of are none of those things. Unless you get a Crown Victoria Police Interceptor, which is the best used car value out there, IMO.

      • 0 avatar
        Lie2me

        Not always, high depreciation can mean something as simple as a glut of used cars, but doesn’t mean they’re bad. Chevy Malibu and Ford Escape are two cars that have a high rate of depreciation, but both are considered pretty good cars. I think a lot may have to do with whether they are popular with rental fleets

      • 0 avatar
        JD-Shifty

        Crown Vic? They haven’t sold those for quite awhile. I swear the median age of this place is about the same as FOX news, about mid 70s? Old man yells at cloud.

        • 0 avatar
          Lie2me

          Crown Vics have a cult-like following and hey, if you think we’re too old here there’s always Jalopnik where you can talk about cars all day with 12 year old boys pretending to be 16 year old boys

          • 0 avatar
            JD-Shifty

            No Crown Vics do not. They’re old and worn out, just like the opinions that they are a good car choice or that many are available in new condition.

          • 0 avatar
            JohnTaurus

            Wow, so they don’t have a dedicated fan base. And here you are ranting at the very subset you just said doesn’t exist.

            And since my close friends mom just bought one that was not a former police car that has like 40k miles, was a one (elderly) owner, and is in pristine condition, I’m pretty sure there are still plenty around that aren’t beat up stripped out former cop cars. You could also look at the Mercury Grand Marquis, which wasn’t even sold as a police car and was more likely to be owned by someone older who took care of it and did not put a lot of miles on it.

            Don’t get me wrong, I DO NOT like these cars, AT ALL. I do not recommend them unless someone does what just a cheap beater and doesn’t care about how it looks or drives. I would most certainly not choose one for myself. They have their good points, but that’s not enough to make me a fan.

            However, that has nothing to do with the fact that they do have their absolutely dedicated fan group (if they like em, more power to em), or that clean low mileage examples can’t be found easily.

      • 0 avatar
        JohnTaurus

        Oh yes, a used police car obviously was driven very easily and never abused. No chance of it being worn out well before its time.

        But I saw a cab with 300k on it! Doesn’t mean police cars have it easy and represent a solid choice for a used car buyer seeking low cost of ownership.

        A far better bet would be Chevy Impala and Ford Taurus, and NOT former police car versions. They both have solid drivetrains with good reliability, and represent a lot of car for the money. Although the chance they were a former rental is a real possibility, I’d trust an ex-rental over an ex-cop car any day.

      • 0 avatar
        arach

        jfb43-

        Hyundai Sonata? Depreciates about 50% in 6-12 months, available CPO for under 10 grand. Very low cost of ownership, especially with the CPO 10yr/100k warranty

        Chevy Volt is normally listed on the fastest depreciating cars list, and I haven’t heard of any reliability concerns there.

        Chevy Impala… very similar to your crown vic recommendation… depreciates 64% in its first few years, and its plenty reliable with a fairly low cost of ownership.

        Nissan Leaf has the highest depreciation rate currently, and frankly IF it fits your lifestyle, it could have a very low cost of ownership.

    • 0 avatar
      Luke42

      That’s how I ended up buying several used Fords.

      The Fords I’ve owned (Tempo, Ranger, Escape, old F-150) all depreciated like Galleleo’s lead balls. But they stayed as useful as the day they were made, and were relatively straightforward to maintain. They weren’t the most reliable vehicles I’ve owned, but they were reliable enough and repairable enough to make them a solid choice.

      The 1st-gen Escape especially depreciated fast. Win! Assuming you really needed a Subaru, but wanted something.cheaper that was tarted up to look like an F-150…

      • 0 avatar
        Lie2me

        Exactly, why a car rapidly depreciates is influenced by so many different factors, reliability being only one

        I currently drive a slightly used Ford Escape, great car and man was it cheap

      • 0 avatar
        JohnTaurus

        Becuase Subarus of that era were so much better (at blowing head gaskets and having cheap interiors and high oil consumption and on and on).

        They both have their issues. With the Escape it was mostly that CD4E transaxle, and those issues could be mitigated by installing a trans cooler and doing regular servicing. But yet the Subaru is more expensive, is my point. And for what? It wasn’t any less troublesome. But it must be better because it isn’t American, I guess (even though Escape was on a Japanese chassis).

        • 0 avatar
          ToddAtlasF1

          Subaru oil consumption has been considerably worse on newer ones than on older ones. About the only thing they ever did a decent job of was providing automatic transmissions that could rack up the miles. That was before they went CVT though. I have at least three customers who traded in their low mileage Subarus because of high oil consumption and Subaru’s unwillingness or inability to do anything about it. They all traded their defective Outbacks and Foresters for new Outbacks and Foresters without invoking the Lemon Law. They’re the battered spouses of automobiles; like F-series buyers are to trucks.

        • 0 avatar
          gtem

          1st gen Escapes are some of the most horrible rotting cars around, yes significantly worse than Subies. They also had truly horrid cheaped out interiors, rock hard nasty plastic anywhere you look, substantially worse than Subarus of the era. Despite all of that (and the CD4E especially), I find them somewhat appealing. They were the first to put a strong V6 in a compact crossover, I like the styling and overall dimensions.

          I was very skeptical of the current gen Escape when it came out way back in 2013, but they have really grown on me and I think they are a good pick in the compact CUV space if you stick to the higher trims and get the 2.0L Ecoboost. It’s a genuinely nice driving, well powered vehicle.

          • 0 avatar
            DeadWeight

            It’s obvious, objective fact, based on statistically reliable metadata, that most Ford vehicles are literally bring up the rear (handing down in the sewer with JLR products) when it comes to durability/reliability.

            Ford makes 3 vehicles that are average relative to segment competitors in terms of reliability, being the Mustang (5.0), Excursion and F-150 (again, 5.0).

            The rest of their lineup is complete scrap, from the EcoSport (literal 3rd world excrement), to Edge, to Focus, to Escape (complete excrement) to Explorer (Ford is being sued right now by many Police Departments because their only fix so far for carbon monoxide leaking into the cabin is to give Police Officers driving Explorers $9 carbon monoxide detectors that they can carry with them in the front seat as they drive their Explorers), to the Fiesta (complete excrement).

            Ford is in awful financial shape now; If F-Series sales dip by even 5%,’let alone 10%-15%, they will be devastated.

    • 0 avatar
      SaulTigh

      My lease is up in 32 days and I spent some time recently getting my ’95 Sable cleaned up and ready to roll as I’m going to make it my daily driver. Factory radio died and so I thought I would be smart and go to the local U-pull-it and get me one. Never been in a yard before and it proved to be futile endeavor as there were only three Tauruses of that vintage, and all the radios were already long gone. Thought I’d try Rangers too but they were all nearly stripped to the bones.

      However, I did note that third and fourth generation Tauruses were THICK on the ground…probably 25 or so in the Ford section and many of them in very decent shape for the bone yard. If you can do your own wrenching, a cleanish to clean Taurus of that vintage would be cheap and easy I think to keep on the road.

      On a side note, this yard also had a few running cars for sale, including a Taurus wagon from about 1990 and I couldn’t believe how much they wanted for some rough looking vehicles. My ’95 Sable is a show piece compared to anything I saw inside or even in the customer parking lot. I’m looking forward to driving it every day.

      • 0 avatar
        JohnTaurus

        If you haven’t already, change the fluid **and filter** in the Sable’s transaxle. Do NOT do a “flush” without removing the filter, its worse than doing nothing at all.

        And don’t let any one tell you “changing the fluid/filter on an old transmission/transaxle is bad for it”. Its pure crap. I changed the fluid and filter on my 1995 Taurus at 220k, its now got over 245k and shifts better than before the service. Same thing on multiple examples of high mileage Taurus, Aerostar, F-Series, Tempo, etc that I’ve owned or worked on. I never had one go out or start acting up after a fluid and filter service. My dad’s Super Duty’s trans started acting funny at about 310k. We changed the fluid and filter for the first time, it now has 343k and is far better (still can act up if under a strenuous load in very hot weather, but drives around reliably otherwise).

        • 0 avatar
          ToddAtlasF1

          I run an independent shop and have been a service writer at a couple of not-so-independent ones. Performing a transmission’s first service after it has started shifting less-than-perfectly is often the transmission’s demise, particularly when you drop the pan and change the filter. I’m glad you’ve had good luck the few times you’ve tried it, but your experience is an outlier. Hell, you’ve had good luck with Fords.

          • 0 avatar
            Lie2me

            “Performing a transmission’s first service after it has started shifting less-than-perfectly is often the transmission’s demise”

            Why is that?

          • 0 avatar
            JohnTaurus

            I have also worked as a service writer, at a dealership but also worked with independent shops, etc. The only time I’d see it happen was when it was “flushed” when the filter was designed to be replaced. My theory is, and I’ve had it backed up by technicians who know more than I do about the internal workings of such complex items, is that the “flush” forces any debris into the filter, which clogs it and restricts the flow of the fluid, which leads to failure.

            I can’t say its true for every transmission/transaxle, but I’ve found that the best possibility for long life (and this is especially true for the AXOD and related transaxle versions) is proper servicing. I have also had similar experience with the A4LD (and related units) used in Aerostar, Explorer, etc.

            I stand by my recommendation for the guy with the 1995 Sable. Unfortunately, the Sable was far more likely to have the 3.8L engine, which a side from being troublesome in itself, it also put far more strain on the transaxle due to its increased torque output.

            Proper maintenance is the best hope for long service life. I mean, no matter the mileage, the car is beyond its expected service life, therefore its survival is heavily based on being treated well.

            That, aside from maintainece, includes letting the car complete its warm up cycle before engaging the transaxle (shifting out of park), and engaging the parking brake *before* putting the car in park and releasing the foot brake. These simple actions can dramatically increase the life of the transaxle.

            My “luck” (and those I know including my family) with Ford products is as much due to how I treat them than anything else.

          • 0 avatar
            ToddAtlasF1

            “My theory is, and I’ve had it backed up by technicians who know more than I do about the internal workings of such complex items, is that the “flush” forces any debris into the filter, which clogs it and restricts the flow of the fluid, which leads to failure.”

            My transmission guru’s observation is that the debris that’s freed up during a flush can wind up anywhere that fluid needs to flow through a restricted passage, which is quite a few places inside a transmission. I’ve never worked anywhere that doesn’t change transmission filters with the fluid when the transmission is equipped with a serviceable filter. Nor does my current shop perform anything that could be billed as a transmission flush. On at least some level, it’s all drain and fills. We’ll cycle four drain and fills in one service rather than flush a transmission, and only then when someone else has put in the wrong fluid.

            Lie2me,

            Servicing a dying transmission finishes the job because there is usually coked fluid in mostly harmless places in a neglected transmission that is still working. When you flush the transmission, or even change the fluid and filter properly, you disturb the crud and it winds up circulating in your transmission until it finds the tightest passage(or filter) it can clog. Then it is game over.

        • 0 avatar
          SaulTigh

          It’s a 3.0 Vulcan with 68,000 miles on it, and a drop-and-drain transmission service with a brake flush is already on my agenda, once I get past my end-of-lease costs.

          I’m a Ford guy, having owned ’90 and ’93 Tauruses, a ’96 Grand Marquis as well as ’94 and ’14 F150s. I’m also a believer in basic maintenance. I’m also NOT a believer in lifetime fluids.

      • 0 avatar
        cimarron typeR

        I’d check car-part.com, I used it quite a bit on my old E36 for used parts.

  • avatar
    vehic1

    chuckrs: Attributing any failure of the CFPB to improper set-up – what a joke.
    The conservative Supreme Court isn’t interested in helping any ‘little guy’ over any big/predatory business. That’s why they passed Citizens United (unlimited campaign $$$, great for corporations and CEOs), damaged Obamacare (to get us back to the old, pay-big-$-and-still-die system), etc.
    Very little Obama could have possibly done, would please that partisan Court.

    • 0 avatar
      Sobro

      I guess the ACLU also “isn’t interested in helping any ‘little guy’ over any big/predatory business” since they also came out for the Citizens United decision.

      “We understand that the amount of money now being spent on political campaigns has created a growing skepticism in the integrity of our election system that raises serious concerns. We firmly believe, however, that the response to those concerns must be consistent with our constitutional commitment to freedom of speech and association. For that reason, the ACLU does not support campaign finance regulation premised on the notion that the answer to money in politics is to ban political speech.”

      aclu.org/other/aclu-and-citizens-united

      And it always amazes me that Obama’s Solicitor General told the Supreme Court that under the FEC rules that books could be banned by the FEC close to an election date and nobody on the left raised their eyebrows. But BIG BUSINESS!!!! CORPORATIONS ARE NOT PEOPLE!!!!

      Back to the topic, it’s obvious that the best value today is in the luxury sedan segment. We had to replace my wife’s ES300 this year because it was in an accident. The 2014 ES350 we bought for $24k had retailed for $43k. It only had 24,000 miles on it, and being a Lexus sedan gave it both the reliability and “hit ’em where they ain’t” factors.

    • 0 avatar
      JohnTaurus

      All you guys need to take your political BS and GTFO with it. Both sides, I don’t care who you are. You’re using a topic very vaguely related to cars as an excuse to stand on your soapbox and b¡tch about Trump or Obama or whoever you happen to hate. ENOUGH ALREADY!

  • avatar
    ddr777

    This does not sit well with what I experience trying to get a new car, my 2016 Accord lease is about to end, I was contacted by the dealer to get me into a new car but it failed just because they are not willing to pay what Honda is asking for my 2016, that is around 17K, if I look at 2016 Accords for sale, almost all of them are listed for more, I don’t know if this is a good indication but seems like they are not super aggressive as they use to be to lease me another car, they are asking for way too much.
    I was dealing with 2 dealerships, the 2 largest in the NYC area.

    • 0 avatar
      MBella

      Try dealing with more dealers. There are no rules on who is the most desperate to sell you a car. You are also in the best time of year if you want a 2018. If no Honda dealers play ball, try someone else.

      • 0 avatar
        PrincipalDan

        Yup.

        There will sometimes be 2018s remaining that are in slightly unloved option combos too that will be priced aggressively.

        My local GMC dealer had a 2018 Acadia AllTerrain that was 2 row and in the only no cost color, fleet white.

        After discounting it $10K it sold quickly.

        Meanwhile the local Dodge dealer has a V6 Durango 4wd that is a 2017.

  • avatar
    jim brewer

    Seems like the increase is driven almost entirely by suv was craze.

    • 0 avatar
      Lie2me

      That’s partly true, used sedans are a lot cheaper then used SUV/crossovers because they are not in demand. A used sedan is probably your best used car buy

    • 0 avatar
      arach

      FOR SURE.

      We bought a used SUV in September…. I couldn’t believe how expensive they are and how well they are holding their values.

      We paid 20 grand for an 8 year old, crappy SUV. That almost sickens me, but we spent weeks looking and couldn’t find a better value that did what we needed it to do.

      Fords, and hyundais were in the mid to upper 20s with 120k on the odometer. I just couldn’t believe it.

      When we found a sub 100k 2011 for just under 20 grand, we had to jump at it. I feel like that should be new car territory though, not “near end of life SUV” territory!

  • avatar
    JohnTaurus

    I know one car that can depreciate pretty rapidly!

    “2013 Nissan Altima SV 109,000 $2200 I bought my Altima new and it is in excellent condition except I was told it needs a transmission replacement and I can’t afford that so asking $2200 obo thank u [number removed]”

    Been on there about a month and she regularly renewed the ad, so its likely still sitting there, being a nice lawn ornament for her.

  • avatar
    arach

    Figures I read this article right AFTER I bought a used car… URGH.

    Maybe I should have waited.

    • 0 avatar
      Erikstrawn

      If you got a good deal, you got a good deal. I’m not sure where Manheim got its numbers, but I also bought a used car in September and did well. I bought a 135K mile 2005 Ford Focus for my daughter for $2000. The body is in beautiful condition and it runs and drives like new. We looked at many cars, both decent and terrible, under $2K before deciding on this one. If you didn’t get a good deal, my condolences.

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