Wholesale Used-Vehicle Prices Decrease in June from Seasonal Adjustment

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.3% in June from May. The Manheim Used Vehicle Value Index declined to 219.9, up 9.7% from a year ago. The non-adjusted price change in June decreased 1.8% compared to May, leaving the unadjusted average price up 10.7% year over year.

In June, Manheim Market Report (MMR) values saw larger declines over the last two weeks than the prior two weeks. Over the last four weeks, the Three-Year-Old Index decreased a net 2.5%. Over the month of June, daily MMR Retention, which is the average difference in price relative to current MMR, averaged 98.4%, meaning market prices were slightly behind MMR values. The average daily sales conversion rate declined to 51.7%, which was a typical seasonal pattern but was at a level below normal for the time of year. For example, the sales conversion rate averaged 57% in June 2019. The lower conversion rate indicates that the month saw buyers with more bargaining power for this time of year.

All major market segments again saw seasonally adjusted prices that were higher year over year in June, except for pickups showing a 2.5% decline. Vans had the largest increase at 23.1%, with compact and sports cars maintaining seasonally adjusted year-over-year gains ahead of the overall industry. Compared to May, all major segments’ performance was down. Pickups and midsize cars lost more than 2%, followed by luxury cars and vans at 1.8% and 1.6%, respectively.

Compared to last year, retail used sales pace declined in June. Leveraging a same-store set of dealerships selected to represent the country from Dealertrack, we estimate that used retail sales increased 5% in June from May. However, the Dealertrack estimates indicate that used retail sales were down 13% year over year. Compared to 2019, sales were down 11%, which was the best comp against 2019 so far this year.

Using estimates of used retail days’ supply based on vAuto data, June ended at 48 days of supply, which was unchanged from 48 days at the end of May but higher than how June ended in 2021 at 39 days. Leveraging Manheim sales and inventory data, wholesale supply is estimated to have ended June at 25 days, higher than how June 2021 ended at 20 days and higher than how May ended at 24 days.

June’s total new-light-vehicle sales were down 13.5% year over year, with one less selling day than June 2021. By volume, June new-vehicle sales were up 1.7% from May. The June SAAR came in at 13.0 million, a 16% decline from last year’s 15.5 million but up 2.3% from May’s 12.7 million pace.

Combined sales into large rental, commercial, and government fleets were up over 8% year over year in June. Sales into rental were down 10% year over year, while sales into commercial fleets were up 23% and sales into government fleets were up 24%. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be down 15.3%, leading to an estimated retail seasonally adjusted annual rate (SAAR) of 11.1 million, up 0.2 million from last month, or 1.6%, and down 8.5% from last June’s 12.1 million pace. Due to weakness in retail, fleet share rose in June to 14.5%, up from last June’s 12.7% and last month’s 13.9%.

Rental risk mileage down, maintaining stability from last year. The average price for rental risk units sold at auction in June was up 30% year over year. Rental risk prices were up 0.9% compared to May. Average mileage for rental risk units in June (at 58,700 miles) was down 32% compared to a year ago and down 7.6% from May.

Measures of consumer sentiment decline again in June. The Conference Board Consumer Confidence Index® declined 4.4% in June when a larger decline had been expected, but the May index was also revised down. Most of the index decline was driven by a 9.9% decline in future expectations as views of the present situation were barely changed, down 0.2% from May. Plans to purchase a vehicle in the next six months increased but remained down year over year. The confidence index has not declined as much as the sentiment index from the University of Michigan, which declined 14.4% in June to a record low. The Michigan index is much more sensitive to inflationary pressures and stock market volatility as its questions focus on personal financial conditions, whereas the confidence survey focuses more on business conditions. The Morning Consult Index of Consumer Sentiment declined 4.5% in June, but it improved modestly in the final week of the month as gas prices came down slightly.

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The Manheim Used Vehicle Value Index quarterly call recording will be available on Monday, July 11.

The complete suite of monthly MUVVI data for July will be released on Aug. 5, 2022, the fifth business day of the month as regularly scheduled. If you have any questions regarding the Index or would like to sign up for updates, please contact the Cox Automotive Industry Insights team at Manheim.Data@coxautoinc.com.