Wholesale Used Vehicle Prices Down by Double Digit Percentages

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of February compared to the industry’s YOY decline of 13.8%.  -  Source: Cox Automotive

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of February compared to the industry’s YOY decline of 13.8%.

Source: Cox Automotive

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 0.9% from January in the first 15 days of February, according to the midmonth Manheim Used Vehicle Value Index released this week.

The index dropped to 202.1, which was down 13.8% from February 2023. The seasonal adjustment added to the decline. The non-adjusted price change in the first half of February rose 0.9% compared to January, while the unadjusted price was down 11.7% year over year.

Over the last two weeks, three-year-old Manheim Market Report (MMR) prices increased an aggregate of 0.3%, which was more than the normal decline of 0.2% for the time of year. Over the first 15 days of February, MMR Retention, the average difference in price relative to current MMR, averaged 99.8%, indicating that valuation models are close to market prices. The average daily sales conversion rate of 59.1% in the first half of the month was above the February 2019 daily average of 55.3%. The conversion rate indicates that the first 15 days of the month saw stronger-than-normal buying demand for this time of year.

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of February. Compared to the industry’s year-over-year decline of 13.8%:

  • Luxury was down 13.2%, and SUVs declined 13.5%.
  • Faring worse than the industry, compact cars were down 16.9%, midsize cars were off by 15.9%, and pickups lost 14.6% year over year.
  • All major segments saw negative price performance compared to January, with pickups and luxury down 1.7% and 1.1 %, respectively, worse than the 0.9% decline for the industry.
  • Compact cars lost 0.7%, SUVs were down 0.5%, and midsize cars lost 0.1%, all better than the industry.
  • Electric vehicles (EVs) were down 16.1% against values for February 2023, while the non-EV segment declined by 12.8% over the same period. Compared to January, non-EVs declined by 0.6%, while EVs were down only 0.3% over the same period.

Wholesale Supply is Down in Mid-February

Leveraging Manheim sales and inventory data, Cox estimates that wholesale supply ended January at 28 days, down four days from the end of December and up three days year over year. Wholesale supply is relatively tighter for this time of year. As of Feb. 15, wholesale supply was down one day from the end of January at 27 days and up two days year over year. However, wholesale supply remains down seven days compared to 2019.

Rental Risk Prices Were Mixed in First Two Weeks of February

The average price for rental risk units sold at auction in the first 15 days of February was down 9.4% year over year. Rental risk prices were up by 0.2% compared to the full month of January. Average mileage for rental risk units in the first half of January (at 46,000 miles) was down 24.2% compared to a year ago and up 6.6% month over month.

Used Retail Vehicle Sales Pick Up in January

Retail used-vehicle sales in January increased from December but were down by 3.1% compared to January 2023, according to estimates based on vAuto Live Market View data.

A total of 1,354,075 used vehicles were sold at retail – from both franchised and independent dealers – during January, up 4.7% from December and the highest volume since August 2023. The higher sales last month reduced inventory levels at retail and pushed days’ supply at the start of February to 49 days, down from 58 at the beginning of January. 

“The year-over-year decline in sales last month may have been caused in some part by the harsh cold snap over much of the country,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotive, in a Feb. 23 news release. “But auto loan rates remain elevated as well, and that is holding down used-vehicle sales volumes. The good news for buyers: Retail prices are down roughly 4% versus 2023, and that can help with affordability as the tax-return season begins to accelerate in 2024.”

The retail used-vehicle sales estimates are based on observed changes in units tracked by vAuto, a Cox Automotive company specializing in inventory management. Retail used-vehicle sales typically increase month over month in January and often peak in the months of March or April of a given year as tax-return season injects money into the economy. January’s sales total of 1.35 million was higher than the total in January 2022 (1.32 million) but down from 2023 and below totals seen in 2019 to 2021, when January retail used-vehicle sales averaged 1.82 million.

CPO Sales in January Stronger than One Year Ago

While overall retail used-vehicle sales declined year over year in January, sales of certified pre-owned (CPO) vehicles were flat, according to data reviewed by Cox Automotive. CPO sales last month are now estimated at 201,621, down from 228,237 in December, a decline of 12%.

CPO sales, which are a subset of total retail used-vehicle sales, improved through most of 2023 as used-vehicle inventory levels increased and some automakers expanded the eligibility of CPO units. Toyota, Ford and Chevrolet, respectively, continue to be the CPO leaders. A total of 2.64 million CPO units were retailed in 2023, up 7% from 2022, and Cox Automotive is forecasting CPO sales in 2024 could reach 2.7 million. Over the past decade, CPO sales in the U.S. have averaged 2.62 million units annually.

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