WEBVTT

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- [Dan] Demand for used cars
suddenly spiked in January,

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which led to rising prices
at wholesale auctions

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and on used car lots.

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Wholesale prices rose by
2.5% from December to January

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according to data from Cox Automotive,

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that's the largest one
month jump since 2021.

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It was all due to a classic yo-yo effect.

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Used car prices dropped in December,

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which led to buyers rushing
out to shop for cars,

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which sent prices back up as CNBC reports.

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The latest figures from December

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put the average used car price at $27,142

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and the average monthly payment at $570.

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The figures for January
will be even higher

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due to the surprise upward trend in prices

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and demand according to Bloomberg.

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As used car prices go up, sales go down.

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Then as used car prices
go down, sales go up.

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Simple.

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But things aren't so bad.

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Even with the uptick in January,

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used car prices are
still around 12.8% lower

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than the previous record
highs according to Bloomberg.

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In that sense, used car prices
are better than they were,

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but now that wholesale values are up,

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retail prices are also on the rise.

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Analysts expect 2023 to end
with lower prices overall,

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but the used car bubble seems
to be showing some resilience.

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Where that will put Carvana

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and other retailers is still unclear,

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but at least the company has
something to look forward to.

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For more in this story and
everything else automotive,

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check out jalopnik.com.