Wholesale Used-Car Prices Shrink, Reports Manheim

The pace of the decline is slowing, but the average, used-vehicle wholesale auction price continues to shrink vs. 2023 levels, according to the Manheim Used Vehicle Value Index (MUVVI) for August.

That implies better used-vehicle affordability, for dealers to acquire used vehicles for resale, and for consumers to find lower, used-vehicle prices at retail.

In turn, lower used-vehicle prices reflect lower new-vehicle transaction prices, higher new-vehicle inventory and higher new-vehicle incentives, Jeff Dyke, president of Sonic Automotive, tells WardsAuto.

Those factors on the new-vehicle side are “why we are seeing the decrease” in used-vehicle prices, Dyke says.

The Manheim Index for August was 203.9. That’s an increase vs. 201.6 in July, and the second month in a row the index was higher than the previous month. Nevertheless, the index was down 3.9% vs. August 2023, Manheim reports.

At 203.9, the Manheim Index was 3.9% lower in August 2024 than it was in August 2023, at 212.2. The August 2024 result made it 24 months in a row that the monthly index was lower than it was, in the same month the previous year. That follows 27 consecutive months of increases in wholesale, used-car auction prices from June 2020 to August 2022, according to Manheim data. Manheim is part of Cox Automotive, Atlanta.

More, cheaper and newer used cars are great news for Sonic Automotive, which has been forced to retrench and pause the expansion of its EchoPark used-only locations,due to rising costs and the industrywide shortage of newer used vehicles.

Sonic, based in Charlotte, NC, had 106 franchised, new-vehicle locations and an average of 18 EchoPark locations in operation in the second quarter of 2024. That’s down from an average of 50 EchoPark locations in the second quarter of 2023.

Three-year-old used vehicles are supposed to be the main offer at EchoPark stores. The shortage of newer used cars has resulted in EchoPark adding older used vehicles to its inventory for consumers searching for lower-priced vehicles.

Lithia & Driveway Motors, Medford, OR, reports in a second-quarter earnings call that its leaders want to increase sales for its Value Auto category of used vehicles 9 years or older. Lithia has 470 dealerships in the U.S., the U.K. and Canada.

The Manheim Index is a single measure designed to track used-vehicle wholesale price changes. It is weighted for a changing mix of product segments and mileage and seasonally adjusted.

The seasonally adjusted average wholesale, used-vehicle auction price was $18,654 in August 2024. That was down 3.9% from $19,412 in August 2023, Manheim says.