On the Dash:
- The Manheim Used Vehicle Value Index reached 207.4 through the first 15 days of October, up 0.7% from September and 2.2% year over year.
- Wholesale supply tightened to 28.2 days from 28.7 days at the end of September, narrowing the year-over-year supply gap to about one day.
- Compact cars and EVs remain relatively strong, but EV values slipped 0.7% month over month while non-EV values rose 0.7%, signaling a shift in wholesale market momentum.
The Manheim Used Vehicle Value Index rose 0.7% to 207.4 through Oct. 15, as wholesale prices, adjusted for mix, mileage and seasonality, climbed from September. The index now sits 2.2% above its level a year ago, rebounding after third-quarter softness.
Non-adjusted wholesale prices fell 2% in the first half of October from September but remain 0.5% higher year over year. Jonathan Gregory, Senior Director at Cox Automotive, said much of the annual gain reflects an easy comparison with last October, which was unusually weak, and that the monthly decline matches the pace October typically brings.
The index showed that wholesale days’ supply fell to 28.2 days as of Oct. 15 from 28.7 days at the end of September, and the gap with last year narrowed from 2.5 days to about one day. Gregory said sales conversion remained slightly above last year while retention eased, and he added that leaner inventory, rather than stronger dealer demand, appears to explain the firmer values.
Additionally, Gregory pointed to fuel efficiency and affordability as the main drivers of segment performance amid persistently high gas prices:
- Compact car prices rose 5.6% year over year
- Midsize car values turned positive
- Luxury vehicle prices slipped slightly below year-ago levels after leading the market in the first half of the year
- Pickup values remained soft
EV prices lose monthly momentum
The EV Index rose 6.8% year over year but fell 0.7% from September, while the Non-EV Index gained 1.3% year over year and 0.7% from September. Gregory said EVs have outperformed all year on sustained demand for fuel-efficient vehicles, yet their momentum is fading as more off-lease EVs reach the market. He added that the mix of what is holding values up is shifting.
Manheim Market Report (MMR) prices for the Three-Year-Old Index fell 1.2% since the start of October, depreciating slightly less than at the same point last year. MMR retention averaged 98.9%, down 0.1 percentage points from a year ago and 0.4 points from September. Sales conversion averaged 54.3%, up 0.3 points year over year but down 0.3 points from September. According to Cox Automotive, retention remained within seasonally normal ranges while sales conversion improved slightly from a year ago.
Gregory said October started on a steadier footing, but the strong start does not erase the third quarter’s weakness, as higher interest rates and weaker consumer sentiment remain concerns. He added that some weakness expected in October may have arrived early in September, after a stronger-than-expected first half of the year. The full month’s data will show whether wholesale values can hold the stability they showed in early October.
