Wholesale Used-Vehicle Prices Increase in First Half of July

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.8% from June in the first 15 days of July. The mid-month Manheim Used Vehicle Value Index increased to 199.7, down 5.7% from the full month of July 2023. The seasonal adjustment reduced the results for the month. The non-adjusted price change in the first half of July declined 0.4% compared to June, while the unadjusted price was down 6.8% year over year. The mid-month rise marked the first month-over-month increase in July since 2018, excluding the pandemic period.

“As we ended June, weekly depreciation trends at Manheim slowed markedly, and that has continued through the first half of July,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive. “Sales conversion has been increasing and is much higher than the last several years at this time, as more dealers are shopping for wholesale units to satisfy consumer demand for used vehicles, right when lease maturities are starting to decline.”

Over the last two weeks, the Manheim Market Report (MMR) prices in the Three-Year-Old Index reversed course and increased an aggregate of 0.3%, which was above the typical normal decline of 0.5% observed at this time of year. Over the first 15 days of July, MMR Retention, the average difference in price relative to current MMR, averaged 99.3%, indicating that valuation models have moved closer to market prices early in July. MMR retention is up one and a half points compared to the prior year at the beginning of July, and it is stronger than the last few years at this time. The average daily sales conversion rate of 58.8% in the first half of the month was below the July 2019 daily average of 60.1%, but it has improved in the last two weeks. The conversion rate rose two full points from June 2024, indicating that we are seeing stronger buying demand in recent weeks.

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of July. Compared to the industry’s year-over-year decline of 5.7%, the SUV segment declined by 6.0% against July 2023, and pickups fell by 6.1% over the same period. Showing a bit more depreciation year over year, midsize cars were down 6.6%, compacts fell by 7.0%, and luxury declined the most, dropping 7.7% year over year. However, several major segments showed larger price increases compared to June against the index performance. The overall industry rose by 1.8% against the prior month. However, compact cars were up 2.7% compared to June, and midsize cars increased by 3.1%, higher than the index overall. Both the SUV and pickup segments increased by 1.8% against June 2024 and the luxury segment was flat over the same period. Electric vehicles (EVs) were down 12.1% against values for July 2023, while the non-EV segment decreased by 5.8% over the same period. Compared to June, non-EVs increased 2.4% in the first half of July, while EVs were up 1.5% in the month.

Wholesale Supply Is Up in Mid-July

Leveraging Manheim sales and inventory data, the estimated wholesale supply ended June at 26 days, flat from the end of May and against June 2023. Wholesale supply is relatively normal for this time of year, running virtually even to longer-term levels. As of July 15, wholesale supply increased by two days from the end of June, moving to 28 days, flat against year-over-year levels. It’s seasonally normal to see wholesale supply increase slightly over the July 4^th holiday.

Rental Risk Prices Declined in the First Two Weeks of July

The average price for rental risk units sold at auction in the first 15 days of July was down 10.0% year over year. Rental risk prices declined slightly compared to the full month of June, falling by 0.6%. Average mileage for rental risk units in the first half of July (at 58,200 miles) was down 3.8% compared to a year ago and increased by 17.8% compared to June.

Measures of Consumer Sentiment Showing Mixed Trends in July

The initial July reading on consumer sentiment from the University of Michigan fell 3.2% to 66.0 when a slight gain had been expected. If that level holds, it will be the lowest level for sentiment since November and down 7.7% year over year. Views of current conditions and future expectations both declined, and expectations for inflation in one year and five years both declined. Consumers’ views of vehicle buying conditions were effectively unchanged, near the lowest level since November 2022. Consumers’ views of vehicle prices and interest rates remain very negative. The daily index of consumer sentiment from Morning Consult shows a slight gain through mid-July. The index increased 0.6% in June and has increased a slight 0.1% in July as of July 15. Sentiment is down 0.6% year to date. According to AAA, the average unleaded gas price has increased 0.7% month to date to $3.52 per gallon as of July 15. Gas prices are down 1% year over year but are up 13% year to date.

The next complete suite of monthly MUVVI data will be released on August 7, 2024.

For questions or to request data, please email manheim.data@coxautoinc.com. If you want updates about the Manheim Used Vehicle Value Index, as well as direct invitations to the quarterly call sent to you, please sign up for our Cox Automotive newsletter and select Manheim Used Vehicle Value Index quarterly calls.

Note: The Manheim Used Vehicle Value Index was adjusted to improve accuracy and consistency across the data set as of the January 2023 data release. The starting point for the MUVVI was adjusted from January 1995 to January 1997. The index was then recalculated with January 1997 = 100, whereas prior reports had 1995 as the baseline of 100. All monthly and yearly percent changes since January 2015 are identical. Learn more about the decision to rebase the index.