Wholesale Used-Vehicle Prices Stabilizing

Wholesale used-vehicle values were down 9.2% vs. a year ago in January, but exactly flat vs. December 2023, a welcome sign of stability, according to the latest Manheim Used Vehicle Value Index.

The index for January 2024 was 204, down from 224.8 a year ago, and the 17^th month in a row the index was below the year-ago month. The corresponding seasonally adjusted average price was $18,664 in January 2024. That’s down 9.2% vs. $20,563 in January 2023, Manheim says.

The January Manheim Index, published on Feb. 7, was down 20.8% vs. January 2022, when the seasonally adjusted average price was a record $23,574.

Jonathan Smoke, chief economist for Manheim parent Cox Automotive, says he expects the Manheim Index to show a small gain overall of about 0.5% at the end of this year after a 7% decline in 2023.

“The used market has been through its worst, and should be going into a multiyear series of increases,” Smoke says at the recent Auto Team America Dealer/CEO/CFO Forum and Buy-Sell Summit in Las Vegas.

Smoke notes the availability of nearly new used cars and trucks continues to be “constrained” in 2024, because of the recent trough in new-vehicle production. That’s due in turn to the pandemic and to supply-chain shortages including computer chips.

Cox Automotive says it expects used-vehicle retail volume of 19.2 million in 2024, not counting street sales between private individuals, up from 19 million in 2023.

The Manheim Index is designed to be a single measure that tracks used-vehicle wholesale price changes, weighted for a changing mix of product segments and mileage, and seasonally adjusted. The index is calculated relative to a starting point where January 1997 equals 100.

Jeremy Robb, senior director of Economic and Industry Insights for Cox Automotive, says in the Feb. 7 announcement that wholesale demand should increase from the present level, as it typically does, ahead of tax refunds.