Wholesale Used-Vehicle Prices Decrease This Month

Performing worse than the industry, midsize cars were down 16.9%, compact cars were off by 16.6%, and pickups lost 15.6% year over year.

Graphic: Cox Automotive

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 0.6% from February in the first 15 days of March, according to the midmonth Manheim Used Vehicle Value Index released March 19, which dropped to 202.6.

The index was down 15% from the full month of March 2023. The seasonal adjustment drove the decline. The non-adjusted price change in the first half of March rose 2.8% compared to February, while the unadjusted price was down 11.6% year over year.

Over the last two weeks, three-year-old Manheim Market Report (MMR) prices increased an aggregate of 1.3%, which was just below the typical normal increase observed of 1.4% at this time of year. During the first 15 days of March, MMR Retention, the average difference in price relative to current MMR, averaged 99.9%, indicating that valuation models are very close to market prices. MMR conversion is up one-tenth of a point against the prior year at the beginning of March. 

The average daily sales conversion rate of 64.1% in the first half of the month was below the March 2019 daily average of 65.3%. The conversion rate has risen four points from February 2024, indicating stronger-than-normal buying demand as wholesale markets move into spring.

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of March.

  • Compared to the industry’s year-over-year decline of 14.9%, luxury was down 13.5%, and SUVs declined 14.5%.
  • Performing worse than the industry, midsize cars were down 16.9%, compact cars were off by 16.6%, and pickups lost 15.6% year over year.

Some major segments showing positive price performance compared to February.  While the industry overall was down 0.6% against the prior month, compact cars were up 1.1%, SUVs were up 0.2%, and luxury was flat at 0% vs February. Midsize cars declined only 0.2%, outperforming the index overall, while trucks fell 0.8%, the only segment faring worse than the industry average.

Electric vehicles (EVs) were down 18.8% against values for March 2023, while the non-EV segment declined by 13.1% over the same period. Compared to February, non-EVs declined by 0.3%, while EVs were down 4.9% over the same period.

Wholesale Supply Is Down in Mid-March

Leveraging Manheim sales and inventory data, Cox estimates that wholesale supply ended February at 25 days, down three days from the end of January and up two days year over year. Wholesale supply remains relatively tighter for this time of year. As of March 15, wholesale supply was down one additional day from the end of February at 24 days and up one day year over year. However, wholesale supply remains down four days compared to 2019.

Rental Risk Prices Remain Mixed in First Two Weeks of March

The average price for rental risk units sold at auction in the first 15 days of March was down 10% year over year. Rental risk prices were up by 1.6% compared to February. Average mileage for rental risk units in the first half of March (at 50,600 miles) was down 22% compared to a year ago and up 8.3% month over month.

Consumer Sentiment Little Changed in March

  • The initial March reading on Consumer Sentiment from the University of Michigan declined 0.5% to 76.9 as future expectations declined but views of current conditions were stable. Expectations for inflation were unchanged from last month. Recent inflation data and readings on gas prices in March indicate that consumers are seeing increases in prices so far this year. However, vehicle prices are continuing to decline, and consumers’ views of buying conditions for vehicles improved to the best level since June 2021.
  • The daily index of consumer sentiment from Morning Consult points to a small increase as well in the first half of March. As of March 15, that index has also increased 0.6% for the month.
  • The average price for unleaded gas has increased 3.2% so far in March, according to AAA, and gas prices are down only 1% year over year.

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