Prices rose again from September to January 2022. That streak came as a surprise to forecasters because prices typically wane in the winter months.
Prices slightly fell through the first four months of 2022, which has been taken as an indication that the wholesale market might be returning to a semblance of normal.
Wholesale prices grew again in May, but not at the pace at which they increased one year ago. Cox Automotive said last week the Manheim Index rose just 0.7 percent from April to May.
Still, when adjusted for mix, mileage and seasonality, wholesale prices are nearly 10 percent higher now than they were in the same period a year earlier.
In these conditions, the dealers who are buying directly from consumers, sourcing inventory off the street or working with a robust new- and used-retail market that supplies trade-ins all have a competitive advantage over dealers who are exclusively sourcing from wholesale channels, Smoke said.
All in all, independent dealers more likely to source from that channel might be having a tough time if they don’t have a thriving new-vehicle business and they can’t access off-lease vehicles.
“This was an issue prepandemic, in terms of access to inventory, and it just has gotten worse because of the price increases that have been more significant in the wholesale market,” Smoke said.
Dealers who have multiple inventory channels are currently in better shape to be competitive and control their costs compared with those who are more dependent on the auction market, Smoke said.