Visit to massive Pa. dealer auction shows car prices rising

WTOP Car Guy Mike Parris got the inside story on the industry by visiting the world's largest wholesale auto auction facility, in Manheim, Pennsylvania.

WASHINGTON — If you’re shopping for a car, it really helps to know the landscape.

WTOP Car Guy Mike Parris got the inside story by visiting the world’s largest wholesale auto auction facility. While the Manheim, Pennsylvania, site is for dealers only, some insights from there could help save you money.

“This is controlled chaos,” Parris said of the facility that boasts 36 auction lanes on more than 400 acres in Lancaster County, about two and a half hours from D.C. “By the end of the day you’re going to find out what the going rate of a car is on the wholesale market — and right now it’s going up,” he said.

The ripple effects of possible tariffs are being blamed for driving up prices in the used car market. The thinking is that if tariffs lead to higher new car prices, used cars would become more appealing to buyers — and the market is already reacting. Manheim said prices saw a bounce in the spring and then another “abnormal upswing” this summer. It said prices are up 5 percent compared to a year ago.

There are still relative bargains, though. “Large luxury sedans definitely lose a lot of value,” Parris said. Electric vehicles are also poor performers on the resale market: “You can get them for pennies on the dollar.”

Conversely, pickups and larger SUVs held their value exceptionally well. Parris said Jeep Wranglers and Toyota 4Runners were especially good performers, with the 4Runner “going for almost what it sold for two or three years ago” when new.

So once dealers buy the cars at auction, just how much do they get marked up?

“If there’s a $10,000 car, you might see it for about $11,000 to $12,000 at a dealer,” while higher-end cars could see a $4,000 to $5,000 markup, Parris said.

Manheim Pennsylvania, offers more than 500,000 vehicles for sale each year, and many make it to the D.C. area. “Definitely if it’s an off-lease vehicle, it’s a very good chance that it actually came from Manheim,” Parris said.

Many rental car companies auction off their cars there as well. One of the largest buyers at the auction is CarMax, which can send 50 to 60 representatives to the weekly sales.

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