The trend that started in October continued into 2023, with all eight major market segments seeing seasonally adjusted prices that were lower year over year in the first half of January. Pickups had the smallest decline at -9.3%, while compact cars and vans lost less compared to the overall industry (down 13.7%) in seasonally adjusted year-over-year changes. Four of eight major segments saw price increases compared to December, with gains from 0.7% to 2.8%. The remaining segments saw declines of between 0.2% and 1.4%.
Graphic: Cox Automotive
Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.5% from December in the first 15 days of January, Cox Automotive reported Jan. 18.
The mid-month Manheim Used Vehicle Value Index rose to 222.5, which was down 13.7% from January 2022. The seasonal adjustment drove most of the gains. The non-adjusted price change in the first half of January was an increase of 0.3% compared to December, while the unadjusted average price was down 12.1% year over year.
Over the last two weeks, Manheim Market Report (MMR) prices have moved in opposite directions but left prices about where they would typically be in mid-January. The first week saw a higher-than-normal decline of 0.4% in the Three-Year-Old MMR Index, but that was followed by an increase of 0.3%, leaving prices down 0.1%, which was the average cumulative change in the six years from 2014 through 2019.
During the first 15 days of January, MMR Retention, the average difference in price relative to current MMR, averaged 99.7%, indicating that valuation models are just below market prices. The average daily sales conversion rate of 57.2% in the first half of January increased relative to December’s daily average of 50.2% and was close to the January 2019 daily average of 57.7%.
Latest Used Vehicle SAAR and Volume
Total used-vehicle sales in December are estimated to be near 2.4 million units, down 4.2% from December 2021. The seasonally adjusted annual rate, or SAAR, is estimated to have finished near 33.7 million, down from last December’s 36.2 million level and below November’s revised 34.4 million pace. Used retail sales were also estimated to be lower in December.
“The used-vehicle market faces a challenging year ahead as demand weakens and supply of nearly new vehicles is particularly constrained," said Charles Chesbrough, senior economist at Cox Automotive, in a news release. "However, the slight sales decline Cox Automotive forecasts for 2023 will be far better than what we saw in 2022,”
Cox Automotive estimates that the total used market finished the year at 36.2 million, down more than 10% from the 40.6 million recorded in 2021, based on preliminary data. Total used sales for 2023 are forecast to be 35.6 million, down another 1%.
Originally posted on Vehicle Remarketing
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