Wholesale used-vehicle prices have risen by 0.5% from July during the first half of August, as the Manheim Used Vehicle Value Index increased to 202.6. Despite the month-over-month growth, the index is down 4.5% compared to the full month of August 2023. This increase follows a trend of strengthening wholesale values observed in July and continuing into August, particularly in the three-year-old vehicle segment, which has seen values rise for five consecutive weeks.
According to Jeremy Robb, Senior Director of Economic and Insights at Cox Automotive, the current market reflects continued strength in wholesale values, with older vehicle segments also showing modest gains. The Manheim Market Report (MMR) prices in the Three-Year-Old Index reversed the usual seasonal decline, rising 0.4% in the first half of August. This performance indicates stronger-than-expected market demand, as evidenced by an average daily sales conversion rate of 63.4%, significantly higher than the 60.0% rate seen in August 2019.
Although all major market segments saw year-over-year price declines in early August, these declines have slowed. For instance, the luxury segment was down 4.1%, midsize cars fell 4.3%, and SUVs dropped 5.0% year over year. However, compared to July 2024, almost all segments experienced price increases, with the luxury segment up 2.3% and midsize cars by 1.2%.
In August 2023, EV prices dropped by 7.2% on a seasonally adjusted basis, while non-EV values decreased by 3.6%. Yet, EV prices saw a significant month-over-month increase of 4.4% in the first half of August, reflecting a positive shift in market dynamics for this segment.
As of mid-August, wholesale supply decreased by two days from the end of July to 25 days, remaining stable compared to year-over-year levels. This supply level is consistent with typical trends for this time of year.
In terms of consumer sentiment, mixed trends were observed in August. The University of Michigan’s preliminary reading indicated a 2.1% increase to 67.8, potentially ending a four-month decline in sentiment, driven by more optimistic future expectations despite worsening views of current conditions. Vehicle buying conditions slightly improved, though consumer attitudes toward vehicle prices and interest rates remain negative. Gas prices have also decreased by 1.4% month-to-date, contributing to a year-over-year decline of 11%, while up 10% year-to-date.
