Used Vehicle Prices Slow Downward Spiral in July

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 1.6% in July from June, according to Cox Automotive.

The Manheim Used Vehicle Value Index (MUVVI) also declined to 211.7, down 11.6% from a year ago, according to Cox.

 “The July drop of 1.6% is an indicator of slowing wholesale price declines, at least when compared to the month-over-month losses we’ve seen since April,” reported Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive.

He added, “While the year-over-year price drop was again double-digit, let’s put some perspective on that. From July 2020, there were 22 straight monthly double-digit increases through April 2022; we’ve had just six double-digit declines since October last year, with only four of them consecutive. Keeping to the April theme, we’re now back to the same index value last seen in April 2021: 211.7. Used retail inventory continues to rebuild; but with used retail sales also showing some summer strength, we do not foresee wholesale price declines of serious import through December.”

The unadjusted average used vehicle price took a hit in July, declining by 3.8% from June, and falling 10.7% from the previous year, finds Cox Automotive.

Cox reported there were also market segments that saw seasonally adjusted prices that continued lower year over year in July. Compared to July 2022:

• Pickups and vans were down 6.6% and 9.9%, respectively
• SUVs were down 11.5% 
• Compact cars were down 15.9%
• Midsize cars were down 14.2%
• Luxury vehicles fell 12.6%
• Sports cars were down 12.1% 

Except for sports cars, all segments also experienced a decline in sales compared to June, according to Cox. Pickups lost less than the industry month over month, down 0.6%, while vans, compact cars, and luxury lost the most, with declines of 3.2%, 2.8%, and 2.4%, respectively.

Overall, Cox Automotive reported used retail sales are estimated to be down only 0.5% year over year in July, which is the best performance since February. The average retail listing price for a used vehicle moved 1.8% lower over the last four weeks.

According to vAuto data, retail days' supply for used cars was at 46 days by the end of July. This is a three-day decrease from June's 49 days, and eight days lower than July 2022's 54 days. According to Manheim's sales and inventory data, wholesale supply for July is estimated at 27 days, which is a slight increase from June but still a decrease from July 2022's estimate of 30 days.

Originally posted on Auto Dealer Today