According to the latest data from Cox Automotive, wholesale used-vehicle prices are holding steady for the first half of December. The mid-month Manheim Used Vehicle Value Index remained at 205.4, a minute 0.7% gain compared to December 2023.
Seasonally adjusted prices remained unchanged from November, aided by a stronger-than-average seasonal factor. Non-seasonally adjusted prices declined 0.5% month-over-month but were up 0.6% year-over-year.
Senior Director of Economic and Insights at Cox Automotive, Jeremy Robb, notes that while early December prices are slightly below typical seasonal trends, the year-over-year gains suggest the market may have reached its pricing floor, reflecting higher values in comparison to the previous year.
During the past two weeks, the Manheim Market Report (MRR) revealed a decline in the Three-Year-Old Index’s prices by 0.5%, slightly higher than the average decline of 0.2% at this time of year. During the first 15 days of the month, MMR Retention averaged 99.8%, implying that valuation benchmarks align more closely with the market prices of early December.
The major market segments revealed varying results, with compact and midsize cars performing the best with flat results. Pickup trucks and SUVs were down 0.3%, and the luxury segments saw a decline of 1.7%.
Compared to November, the industry saw no changes on average. However, pickup trucks increased by 1.2% and compact cars by 0.8%. Midsize cars, SUVs, and luxury vehicles declined by 0.4%, 0.4%, and 0.7%, respectively. Electric vehicles (EVs) dropped by 7.6% year-over-year but gained 3.5% compared to November.
At the end of November, wholesale used-vehicle supply ended at 29 days. By mid-December, it’s dropped to 28 days. Wholesale supply remains tight by about 3 days compared to long-term averages for December.
Consumer demand remains elevated, as indicated by the industry’s daily sales conversion rate of 59.%, up 5 points from November and higher than December 2019. In addition to these market trends, consumer sentiments continue to rise as gas prices drop. The Consumer Sentiment Index from the University of Michigan rose 3.1% to 74.0 in early December, marking an incredible 20.7% year-over-year increase. As consumers’ outlook on vehicle buying conditions improves, they’re getting off the fence and more willing to purchase. These are the best levels since March, driven primarily by falling gas prices, improving interest rates, and improving affordability. On average, gas prices have dropped to $3.02 per gallon, down 0.9% month-to-date and 1% year-over-year.
