- Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.0% from June in the first 15 days of July.
- The midmonth Manheim Used Vehicle Value Index dropped to 213.1, which was down 11.1% from the full month of July 2022.
- The non-adjusted price change in the first half of July declined 3.0% compared to June, while the unadjusted price was down 10.0% year over year.
Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.0% from June in the first 15 days of July. The midmonth Manheim Used Vehicle Value Index dropped to 213.1, which was down 11.1% from the full month of July 2022. The seasonal adjustment mitigated the decline. The non-adjusted price change in the first half of July declined 3.0% compared to June, while the unadjusted price was down 10.0% year over year.
Over the last two weeks, Manheim Market Report (MMR) prices declined an aggregate of 1.8%, which is an elevated level of decline for the time of year. Over the first 15 days of July, MMR Retention, the average difference in price relative to current MMR, averaged 98.5%, indicating that valuation models remain ahead of market prices. The average daily sales conversion rate of 47.4% in the first half of July declined relative to June’s daily average of 51.9% and was below the July 2019 daily average of 60.1%.
All major market segments saw seasonally adjusted prices that were lower year over year in the first half of July. Pickups lost the least, down 6.5%, followed by vans, down 8.8%. Compact cars lost the most, at 15.0%, followed by midsize cars, off 13.2%. All major segments also saw price decreases compared to June, with losses ranging from 0.5% to 2.1%. Sports cars were again the sole outlier versus the other segments, with a 2.6% gain from June.
Retail Supply Lower in Mid-July
Using estimates based on vAuto data as of July 10, used retail days’ supply was 46 days, which was down one day from the end of June. Days’ supply was down six days year over year and down two days compared with the same week in 2019. Leveraging Manheim sales and inventory data, we estimate that wholesale supply ended June at 25 days, up one day from the end of May and down one day year over year. As of July 15, wholesale supply was up three days from the end of June at 28 days and up one day year over year but down one day compared to 2019. Used retail supply measured in days’ supply and compared to 2019 suggests supply is tighter than normal for this time of year. Still, wholesale supply has increased with weaker wholesale purchase activity in early July, yet it is otherwise normal for this time of year.
Rental Risk Prices Decline in First Two Weeks of July
The average price for rental risk units sold at auction in the first 15 days of July was down 7.1% year over year. Rental risk prices were also lower by 5.1% compared to the full month of June. Average mileage for rental risk units in the first half of July (at 58,400 miles) was down 0.7% compared to a year ago but up 2.9% month over month.
Consumer Sentiment Improving in July
The initial July reading on Consumer Sentiment from the University of Michigan increased by 12.7% to 72.6 as views of both current conditions and future expectations increased. However, the median expected inflation rate over the next year increased to 3.4% from 3.3% last month, and the longer-term view increased by 0.1% to 3.1%, which will concern the Fed. Consumers’ views of vehicle buying conditions improved to the best level since February and were much better than a year ago. Consumers saw improvement in prices and interest rates but still viewed both negatively. The daily index of consumer sentiment from Morning Consult is little changed so far in July as it has declined 0.2% through July 15 compared to the end of June. Consumers’ expectations of the future remain near the highest daily levels seen since August 2021.
The complete suite of monthly MUVVI data for June will be released on Aug. 7, 2023, the fifth business day of the month, as regularly scheduled. The next quarterly call is scheduled for Friday, Oct. 6, at 11 a.m. EDT.
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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.