U.S. Used-Car Prices at Record High

Sales of used cars in the U.S. rose 8% in September to an annualized pace of 40.4 million units, says Atlanta-based Cox Automotive Inc.

The company, whose brands include Autotrader, Kelley Blue Book and Manheim, says cars less than four years old represent the largest segment of the American used-car market. Demand for such vehicles is up 5% this year.

Cox’s Manheim vehicle auction service reports that its used-car price index rose to a record 134.9 in September. The index, an adjusted measure of wholesale used-vehicle prices, has been setting monthly records since May.

Jonathan Smoke, the company’s chief economist, says rising prices are a direct result of consumers replacing vehicles damaged by hurricanes Harvey and Irma. The surge has pushed prices higher in all major market segments: compact cars (+4%), midsize cars (+2%), pickup trucks/vans (+9%), SUV/crossovers (+6%) and luxury cars (+6%).

Smoke predicts high replacement demand and shrinking inventories will push used-car prices in the U.S. higher for at least another month or two.