Wholesale used vehicle prices edged up by 0.3% in the first half of October, according to the Manheim Used Vehicle Value Index, rising to 203.5. Despite this increase, prices were still down 2.8% from October 2023. The seasonal adjustment slightly reduced the gains for the month, while non-adjusted prices dropped by 1.7% compared to September and were 3.5% lower year-over-year.
Jeremy Robb, senior director of Economic and Insights at Cox Automotive, explained that October typically sees the highest depreciation rates for non-adjusted values, but the decline has been more muted this year. The Manheim Market Report (MMR) for three-year-old vehicles showed a 1.0% price decrease over the last two weeks, less than the typical 1.3% decline for this period. MMR retention, which measures how close prices align with market trends, averaged 98.1%, slightly lower than in recent years.
The average daily sales conversion rate was 56.6% in early October, higher than October 2019’s average of 52.2%, though it fell from September due to slower business in hurricane-affected regions. All major vehicle segments experienced year-over-year price declines, but the drops were less severe compared to earlier in the year. Compact and midsize cars saw the smallest declines, down 2.2% and 2.3%, respectively, while SUVs and pickups fell more, dropping by 5.6%.
Compared to September, compact and midsize cars improved, with increases of 1.4% and 1.2%, while luxury vehicles saw the largest decline, down 1.2%. Electric vehicles (EVs) continued to depreciate more quickly, down 12.4% year-over-year and 2.0% since September. Non-EV segments experienced less dramatic drops, declining by 3.1% year-over-year and 0.7% from September.
Wholesale supply stood at 28 days by mid-October, one day higher than at the end of September and the same period last year. Despite the increase, supply remains tighter than the long-term average for this time of year.
Consumer sentiment in October was mixed. The University of Michigan’s initial reading showed a 1.7% drop to 68.9, though sentiment was still 8% higher year-over-year. Inflation expectations rose to 2.9% for one year, but five-year expectations fell slightly to 3.0%. Despite these declines, consumer views on vehicle buying conditions improved, with more positive attitudes toward interest rates. Morning Consult’s daily index reflected a 1.4% increase in sentiment in both September and the first half of October, continuing an upward trend, leaving the index up 10.8% year-over-year.
