DETROIT – Wholesale used-vehicle prices have notably fallen from a record high, set in January, signaling the worst of sky-high prices related to higher inflationWe may not be able to see the U.S.

Cox Automotive said on Friday that its Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, declined 1% in April from March – marking the third straight month of declines from the first month of the year.

It is clear that vehicles are depreciating once again. Jonathan Smoke, Cox Automotive’s chief economist, said to CNBC that this is good news both for inflation and consumers trying to buy vehicles.

Since January’s record, wholesale vehicle prices dropped 6.4%. The index is still up 14% compared to a year earlier, but prices remain high.

According to Manheim, the price drop is due to lower retail sales. This suggests that demand has slowed amid record high prices.

For more than one year, automakers have been fighting through the aforementioned. semiconductor chip shortageThis has caused production to be halted intermittently, leading to record low inventories and increased prices. These circumstances have led to many people buying used cars.

Smoke believes used vehicle prices will continue to rise, but that they will return to “fairly usual patterns.” There is also the potential to see a couple of modest price hikes later in the year.

Smoke stated that “it’s possibly becoming a bit of deflationary that regard,” but that does not necessarily mean that there will be a huge price correction. Smoke stated that this isn’t a market where people speculate on commodities. Used vehicles, however, are assets that provide utility for individuals.

He said, “We were in an exceptional situation over the past 2 years which has stimulated demand. We have limited supply.”

These declines are positive news for Biden’s administration. They have largely been responsible for rising inflation in the country. on the used vehicle market. Over the 20-year period, inflation’s contribution from used cars has averaged zero. It contributed over 1% to inflation in January according data from U.S. Bureau of Labor Statistics.

Inflation has caused prices to rise to historical levels in the last year. Biden’s administration has found this trend to be politically harmful. It has also stoked fear of “stagflation,” a unwelcome combination of high prices and slow economic growth.

 – CNBC’s Kevin BreuningerThis report was contributed by you.