Wholesale Used-Vehicle Prices Hold Steady in the First Half of December

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) showed no change from November in the first 15 days of December. The mid-month Manheim Used Vehicle Value Index remained at 205.4, now showing a gain of 0.7% from the full month of December 2023. The seasonal adjustment enhanced the results for the month, as the seasonal factor was stronger than the long-term average for the month of December. The non-adjusted price change in the first half of December fell 0.5% compared to November, placing the unadjusted price up 0.6% year over year. The average move for the month of December is an increase of three-tenths of a point for non-seasonally adjusted values, highlighting that the current change midway through the month shows a bit more depreciation than we normally see.

“We’ve continued to see tighter wholesale supply at Manheim over the last several weeks, and it has further declined in early December as sales conversion remains elevated,” said Jeremy Robb, senior director of Economic and Insights at Cox Automotive. “December usually shows a small gain in non-seasonally adjusted prices for the full month of December, but we are running below that trend early in the month. However, this is our second report in a row with the Manheim Used Vehicle Value Index exhibiting higher values year over year, so it appears we’ve seen the bottom in wholesale prices for now.”

Over the last two weeks, the Manheim Market Report (MMR) prices in the Three-Year-Old Index declined an aggregate of 0.5%, which was higher than the normal decline of 0.2% observed at this time of year. Over the first 15 days of December, MMR Retention, the average difference in price relative to current MMR, averaged 99.8%, indicating that valuation models have moved closer to market prices early in December. MMR retention is much higher, up two full points compared to the prior year at the beginning of December. The average daily sales conversion rate of 59.9% in the first half of the month was several points higher than the December 2019 daily average of 52.2%. The conversion rate has now increased by almost 5 percentage points from last month. It’s normal to see an increase in conversion in the first half of December following the Thanksgiving holiday, and it should slow down in the last week of the month. However, buying demand continues to be elevated at this time of year.

Major market segments saw mixed results for seasonally adjusted prices year over year in the first half of December. Compared to the industry’s year-over-year increase of 0.7%, compact and midsize cars performed best, showing no change. On the other side of the equation, pickup trucks and SUVs were down 0.3%, and luxury was down 1.7% over the period.

Comparing results against the end of November, results varied by segment. The overall industry showed no change against the prior month, and pickup trucks performed best, rising by 1.2%, while compact cars increased by 0.8%. Midsize cars and SUVs declined 0.4% against the prior month, and the luxury segment fell the most, declining 0.7% over the same period.

Electric vehicles (EVs) continued to exhibit the highest depreciation levels, yet the overall decline was lower than the last several reports. EVs were down 7.6% against December 2023, while the non-EV segment fell by 0.2%. Against November values, EVs showed a strong gain and increased by 3.5% in the first half of December, while non-EVs were lower by 0.2%. Non-adjusted EV values were also higher by 2.4% in the first half of December, though the seasonal adjustment strengthened the overall results.

Wholesale Supply is Down in Mid-December

Leveraging Manheim sales and inventory data, estimated wholesale supply ended November at 29 days, up one day from the end of October and flat against November 2023, also at 29 days. Wholesale supply continues to hold tighter at this time of year, running three days lower than the longer-term levels for this week. As of Dec. 15, wholesale supply decreased by one day from the end of November, moving to 28 days, which is down one day versus last year.

Measures of Consumer Sentiment Mixed in December

The initial December reading on Consumer Sentiment from the University of Michigan increased 3.1% to 74.0, which was a little stronger than expected and left the index up 20.7% year over year. Current conditions drove the increase as expectations declined. Expectations for inflation in one year increased to 2.9% from 2.6%, but expectations for inflation in five years fell to 3.1% from 3.2%. Consumers’ views of buying conditions for vehicles jumped to the best level since March as views of prices and interest rates improved. The daily index of consumer sentiment from Morning Consult shows a small decline through Dec. 15. The index increased 5.6% in November but is down 0.5% in the first half of December. Sentiment was up 14.1% year over year. According to AAA, the average unleaded gas price has declined 0.9% month to date to $3.02 per gallon as of Dec. 15. Gas prices are down 1% year over year and down 2.8% year to date.

The next complete suite of monthly MUVVI data will be released on Jan. 8, 2025. The Q4 MUVVI call will be held on Jan. 8 at 11 a.m. EST. Register to attend.

For questions or to request data, please email manheim.data@coxautoinc.com. If you want updates about the Manheim Used Vehicle Value Index, as well as direct invitations to the quarterly call sent to you, please sign up for our Cox Automotive newsletter and select Manheim Used Vehicle Value Index quarterly calls.

Note: The Manheim Used Vehicle Value Index was adjusted to improve accuracy and consistency across the data set as of the January 2023 data release. The starting point for the MUVVI was adjusted from January 1995 to January 1997. The index was then recalculated with January 1997 = 100, whereas prior reports had 1995 as the baseline of 100. All monthly and yearly percent changes since January 2015 are identical. Learn more about the decision to rebase the index.