More Americans are looking for affordability laser focused on the monthly payment. The cost of a used car has hit its highest level since March 2023- rising just over 6 percent- according to a new report from the Manheim Index. CarEdge CEO, Ray Shefzka says the cost of a used car is up- in part- because manufacturers aren’t focused on affordability with 20 percent of the market- unaffected. “They’re perfectly content to market to those who can actually afford to pay these types of prices.” Shefzka said.
As for the other 80 percent, looking for affordability, they will see an increase in higher wholesale auction pricing. The Manheim report found that buyer activity was strengthening and there was increased competition for the available inventory in the wholesale lanes, as the sales conversion rate rose to 68.2% in March. That's 4.6 percentage points higher than the most recent three-year average for March. “Dealers will take those aged vehicles and resale them at a wholesale level to other dealers. That conversion rate was hovering around 49 percent about 5 to 6 months ago.” He said.
According to the report, used electric vehicles (EVs) also showed strength in the first quarter with firm pricing and activity for the quarter as values rose alongside the seasonal increase.
Although the conflict in Iran can bring on uncertainty, the report says this isn’t the case at this time. Americans have a renewed interest filing their taxes early reaping the benefits of the bigger tax break they are expecting from President Trump’s One Big Beautiful Bill.