Cox Automotive reported the wholesale price for pre-owned vehicles rose for the month of July from a month earlier.
The Manheim Used Vehicle Value Index (MUVVI) rose to 201.6, a decline of 4.8 percent from a year ago. The seasonal adjustment to the index amplified the impact on the month, resulting in values that rose 2.8% month over month. The non-adjusted price in July increased by 0.6% compared to June, moving the unadjusted average price down 5.9% year over year.
In July, Manheim Market Report (MMR) values saw weekly increases in three of the last four weeks, higher than what is normal for weekly value changes over the month. Over the last four weeks, the Three-Year-Old Index increased an aggregate of 1.1 percent, including a rise of 0.5 percent in the last week of the month.
Those same four weeks delivered an average decrease of 0.6 percent between 2014 and 2019, illustrating that the appreciation trend for the month of July contrasted against long-term averages.
Robb Comments
Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive, observed wholesale value declines slowed in late June and that trend continued throughout July as values appreciate over the course of the month.
“The sales conversion rate has been higher for each week in July, and that translated to higher prices overall at the wholesale level for the month,” said Robb in a press statement. “We are just beginning to see lower lease maturities for the key 3-year-old segment, and that impact will be felt over the rest of this year and into 2025 and 2026.”
During July, daily MMR Retention averaged 98.6 percent, meaning market prices stayed below MMR values again this month yet moved closer than they were in June 2024. Against last month, valuation models moved up eight-tenths of a point on MMR retention.
Category Sales
The average daily sales conversion rate rose to 60.1 percent, a rise of three and a half points over last month and higher than we normally see at this time of year. For comparison, the daily sales conversion rate averaged 51.9 percent in July over the last three years.
The major market segments all experienced seasonally adjusted prices that were down year over year in July, though the pace of declines has slowed from previous periods. Compared to July 2023, SUVs declined by 5.2 percent, pickups 5.3 percent, midsize cars 6.0 percent, luxury 6.2 percent, and compact cars 6.4 percent.
Seasonally adjusted electric vehicle (EV) values for July 2024 were down 11.0 percent, while non-EVs were down 5.0 percent year-over-year. Looking at the change against last month, seasonally adjusted EV values were flat with the market overall, both rising by 2.8 percent from June 2024, while non-EVs increased by 3.3 percent over the same period.
Retail Used-vehicle Sales Increased in July
Assessing retail vehicle sales based on observed changes in units tracked by vAuto, retail used-vehicle sales in July were up 5 percent compared to June but lower year over year by 2 percent. The average retail listing price for a used vehicle decreased 0.5% over the last four weeks.
Using estimates of retail used days’ supply based on vAuto data, an initial assessment indicates July ended at 53 days’ supply, up one day from 52 days at the end of June and up four days from July 2023 at 49 days.
“As supply tightens for this key segment for the used vehicle market, we expect to see variances from historical average depreciation rates,” said Robb.
