Wholesale used-vehicle prices increased 1.8 percent from June in the first 15 days of July, the first month-over-month increase excluding the pandemic period for the mid-month report since July 2018.
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 percent, which was above the typical normal decline of 0.5 percent 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 percent, 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 percent in the first half of the month was below the July 2019 daily average of 60.1 percent, 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.
Manheim Used Vehicle Value Index
But while there was an increase from last month, all other metrics for mid-month Manheim Used Vehicle Value Index in comparative times periods were down.
The index stands at 199.7 midway through July, down 5.7 percent 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 percent compared to June, while the unadjusted price was down 6.8 percent year over year.
“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, in a press statement.
“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.”
Sector Breakdown
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 percent, the SUV segment declined by 6.0 percent against July 2023, and pickups fell by 6.1 percent over the same period.
Showing a bit more depreciation year over year, midsize cars were down 6.6 percent, compacts fell by 7.0 percent, and luxury declined the most, dropping 7.7 percent 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 percent against the prior month. However, compact cars were up 2.7 percent compared to June, and midsize cars increased by 3.1 percent, higher than the index overall.
Both the SUV and pickup segments increased by 1.8 percent against June 2024 and the luxury segment was flat over the same period.
EV Market
Electric vehicles (EVs) were down 12.1 percent against values for July 2023, while the non-EV segment decreased by 5.8 percent over the same period. Compared to June, non-EVs increased 2.4 percent in the first half of July, while EVs were up 1.5 percent in the month.
The estimated wholesale supply ended June at a historically normal level of 26 days, flat from the end of May and against June 2023.
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 4th holiday.
