The wholesale used vehicle market experienced a notable cooling in October, a trend that aligns with typical seasonal patterns but also reflects the unique pressures of the current automotive landscape. The Manheim Used Vehicle Value Index (MUVVI) registered a 2.0 percent decline from September, settling at 202.9. This dip, while expected, still provides valuable insights into the current state of the market as dealers and consumers head into the final months of the year.
“Trends get a little spooky in October for the wholesale markets, typically showing us the highest levels of depreciation in the year – and this year was no exception,” said Jeremy Robb, Deputy Chief Economist at Cox Automotive. “It’s typical to see higher declines for values in October, as dealers slow down ahead of winter, and the new model year mix grows in retail inventory – both of which can put pressure on values.”
A Seasonal Softening in Prices
The 2.0 percent month-over-month decline in the seasonally adjusted MUVVI does indeed reflect a market adjusting to that slower winter demand, but prices also fell when unadjusted. On a non-adjusted basis, prices were down 3.7 percent from September, now only up 0.2 percent year over year, despite the consecutive price increases we saw earlier in the summer.
Despite the monthly dip, the index overall remains mostly unchanged compared to October 2024, indicating that the market has maintained a level of stability over the past year. The sales conversion rate, a key indicator of demand, softened slightly to 54.9 percent but remained higher than the recent three-year average for this time of year. This suggests that while demand is moderating as expected, it continues to be solid.
Segment Performance: Luxury Outperforms, Cars Decline
The pricing trends in October were not uniform across all vehicle segments. Luxury vehicles continued to outperform the overall market, a trend that has been consistent for several months. This segment’s strength is partly influenced by higher prices in the electric vehicle market, which includes many luxury models. Luxury was up 3.6 percent year over year, EVs were up 3.9 percent year over year, and every other segment has seen value decline since last October.
Compact and mid-size cars experienced the largest year-over-year price declines at 6.5 percent and 4.6 percent respectively. Pickups were down 2.3 percent while SUVs were down just 0.8 percent year over year. This divergence continues to highlight the ongoing consumer preference for larger vehicles.
The EV Market Finds Its Footing
While EVs at large see wild fluctuations in demand due to expiring tax credits, used electric vehicles continue to exhibit more price volatility than the rest of the market. The Manheim EV Index saw a 3.0 percent decline from September, a move influenced by that expiration of the federal EV tax credit. However, on a year-over-year basis, the EV Index was up 3.9 percent, reflecting a recovery from the more depressed values seen in 2024.
In contrast, the Non-EV Index was down 2.2 percent from September and down just 0.1 percent year-over-year. The distinct performance of both categories underscores how incentives, consumer sentiment, and new technology uniquely impact the EV market.
Inventory and a Look Ahead
Wholesale supply showed a slight increase in October, with days’ supply rising by two days to 28. This figure is still below the historical average of 30 days, suggesting that inventory remains somewhat tight. As retail demand showed strength toward the end of the month, the rate of price depreciation slowed.
“With tighter days’ supply and solid demand, we may see lower depreciation trends for the rest of Q4,” said Robb. “Consumers should see higher tax refunds next year and as more dealers catch wind of that, we could expect more demand at wholesale and retail earlier than usual next year.”
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