In July, wholesale used-vehicle prices experienced an increase, with the Manheim Used Vehicle Value Index (MUVVI) rising to 201.6, marking a 2.8% uptick from June. Despite this increase, prices remain 4.8% lower than they were a year ago. The non-adjusted price also saw a 0.6% increase from June but is down 5.9% year-over-year.
Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive, noted that while wholesale value declines slowed in late June and continued into July, overall vehicle values appreciated throughout the month. He highlighted a higher sales conversion rate and anticipated a tightening supply in the key three-year-old vehicle segment, which could impact depreciation rates going forward.
The Manheim Market Report (MMR) values reflected weekly increases in three of the last four weeks of July, which contrasts with historical trends. The Three-Year-Old Index saw a total increase of 1.1% over the month, with a 0.5% rise in the final week. This appreciation diverges from the average 0.6% decrease typically seen between 2014 and 2019.
Daily MMR Retention averaged 98.6% in July, indicating that market prices were closer to MMR values than in June. The average daily sales conversion rate also rose to 60.1%, up from 51.9% over the past three years.
In terms of market segments, SUVs and pickups saw seasonally adjusted price declines of 5.2% and 5.3% year-over-year, respectively. Midsize cars and luxury vehicles also experienced 6.0% and 6.2% declines. However, midsize and compact cars improved in July, with rises of 3.8% and 3.3%, while SUVs, pickups, and luxury vehicles had more modest increases.
The performance of EVs versus non-EVs continues to diverge, with EV values down 11.0% year-over-year and non-EVs decreasing by 5.0%. Both segments saw a 2.8% increase from June, but non-EVs showed a slightly higher 3.3% increase.
Retail used-vehicle sales were estimated to be up 5% compared to June but down 2% year-over-year. The average retail listing price decreased by 0.5% over the past four weeks, and the days’ supply of retail used vehicles ended July at 53 days, up from 52 days in June.
July new-vehicle sales were down 2.0% from last year and 3.0% from June, with a seasonally adjusted annual rate (SAAR) of 15.8 million. Sales to large rental, commercial, and government fleets decreased by 14.0% year-over-year, while new retail sales rose by 1.6% compared to last year.
Consumer sentiment showed mixed signals, with the Conference Board Consumer Confidence Index® increasing by 2.6% in July but down 12.0% year-over-year. Plans to purchase a vehicle declined, reflecting the lowest share in nine months. Gas prices also saw a slight decline of 0.2% in July, with the national average at $3.48 per gallon, down 8% year-over-year.
Overall, the wholesale used-vehicle market experienced positive trends in July, with prices increasing and various market segments showing improvements. The impact of tightening supply and changing consumer sentiment will be important factors to monitor in the coming months.