Wholesale used-vehicle prices saw a modest 0.2% decline in the first half of September, according to the latest Manheim Used Vehicle Value Index, which now stands at 203.6—down 5% from September 2023. The seasonal adjustment softened the decline, as non-adjusted prices ticked up 0.2% month-over-month, though they remain 4.6% lower than a year ago. This comes as typical price changes for September are generally positive, indicating that current trends are slightly below the historical average.
According to Jeremy Robb, Senior Director of Economic and Industry Insights at Cox Automotive, the dip is largely attributed to the lingering effects of the Labor Day holiday, which often impacts the auto industry for weeks. Despite this, the wholesale market is still experiencing less-than-normal depreciation trends. Prices in Manheim’s Three-Year-Old Index declined by only 0.4%, better than the typical 0.7% seasonal drop.
Demand also saw some softening. The average daily sales conversion rate in early September was 61.3%, down from August but still above pre-pandemic September averages of 55.3%. This decline in buying activity is another seasonal effect tied to the holiday.
Year-over-year price declines were consistent across most major market segments. While the industry as a whole dropped by 5%, luxury vehicles performed slightly better, with a 3.4% decline, and compact cars fell by 4.6%. On the other hand, SUVs, midsize cars, and pickups saw larger drops of 5.2%, 5.7%, and 7.5%, respectively.
In terms of inventory, wholesale supply was slightly tighter. August ended with 25 days of supply, down two days from July, though it remained flat compared to last year. As of mid-September, wholesale supply increased by one day to 26 days, matching year-over-year levels.
Meanwhile, consumer sentiment is showing signs of improvement. The University of Michigan’s initial September reading revealed a 1.6% increase in consumer confidence, the highest level since May. Views on vehicle buying conditions also improved to the best level since June 2021, driven by an easing of vehicle prices. Additionally, average gas prices have dropped 3.8% month-to-date, standing at $3.21 per gallon. Although gas prices remain up 3.2% year-to-date, they are down 17% compared to last year.
