Used Vehicle Value Index
Quarterly Conference Call
Monday, Jan 8
11am ET
You are invited to join Cox Automotive Chief Economist Jonathan Smoke and Chris Frey, Senior Manager of Economic and Industry Insights, as they discuss the latest Manheim Used Vehicle Value Index and the major economic and industry trends that shaped the quarter. Jonathan and Chris will be joined by Jeremy Robb, Senior Director of Economic and Industry Insights at Cox Automotive, who will highlight key wholesale pricing and sales conversion metrics.
Listen to a recording of the last call.
The presentation will be available one hour before the conference call.
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By applying statistical analysis to its database of more than 5 million used vehicle transactions annually, Manheim has developed a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold. View the index methodology.
The Manheim Index is increasingly recognized by both financial and economic analysts as the premier indicator of pricing trends in the used vehicle market, but should not be considered indicative or predictive of any individual remarketer’s results.
Wholesale Used-Vehicle Prices Decline in First Half of November
Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.6% from October in the first 15 days of November. The mid-month Manheim Used Vehicle Value Index declined to 206.1, which was down 5.3% from the full month of November 2022. The seasonal adjustment reduced the decrease. The non-adjusted price change in the first half of November dropped 2.3% compared to October, while the unadjusted price was down 6.9% year over year.
Over the last two weeks, Manheim Market Report (MMR) prices declined an aggregate of 1.9%, which was more than the normal decline of 1.0% for the time of year. Over the first 15 days of November, MMR Retention, the average difference in price relative to current MMR, averaged 98.8%, indicating that valuation models are ahead of market prices. The average daily sales conversion rate of 52.8% in the first half of November was above the November 2019 daily average of 50.8%. The conversion rate indicates that the first 15 days of the month saw slightly stronger-than-normal buying demand for this time of year.
All major market segments saw seasonally adjusted prices that were again lower year over year in the first half of November. Pickups, SUVs, and vans lost less than the industry’s year-over-year decline of 5.3%, at 4.2%, 4.8%, and 5.0%, respectively. Compact cars continued to slide, down 10.7%, midsize cars were off by 8.0%, and luxury lost 6.1% year over year. Most major segments saw negative price performance compared to October, with luxury the only gainer, up 0.3% in a down month. Pickups lost 2.8%, midsize cars were down 2.1%, and SUVs were equal to the industry, with a 1.6% decline. Compact cars and vans, down 1.3% and 0.7%, lost less than the industry in month-over-month declines.
Wholesale supply unchanged in mid-November. Leveraging Manheim sales and inventory data, we estimate that wholesale supply ended October at 27 days, up one day from the end of September and flat year over year. As of Nov. 15, wholesale supply was unchanged from the end of October at 27 days, down one day year over year and down three days compared to 2019. Wholesale supply is tighter than normal for this time of year.
Rental risk prices and mileage declined in first two weeks of November. The average price for rental risk units sold at auction in the first 15 days of November was down 6.3% year over year. Rental risk prices were down by 4.7% compared to the full month of October. Average mileage for rental risk units in the first half of November (at 47,200 miles) was down 12.7% compared to a year ago and down 6.7% month over month.
Measures of consumer sentiment mixed to start November. The initial November reading on Consumer Sentiment from the University of Michigan declined 5.3% to 60.4, as views of both current conditions and future expectations declined. Worries about inflation are again driving much of the decline as the median expected inflation rate over the next year increased to 4.4% from 4.2% last month, and the longer-term view increased to 3.2% from 3.0%. That five-year view of inflation was the highest since 2008 and is worrisome as it suggests consumers are anchoring to a persistent level of higher inflation. Consumers’ views of vehicle-buying conditions declined to the worst level so far this year. The daily index of consumer sentiment from Morning Consult tells a slightly different story, including the daily readings from this week. As of Nov. 16, that index has increased 0.7% in November. The improvement in the daily gauge of consumer sentiment aligns with average gas prices’ declining 3.5% so far this month to the lowest levels since early January.
