Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 3.2% from May in the first 15 days of June, according to the midmonth Manheim Used Vehicle Value Index, which dropped to 217.3, or 9.4% from June 2022. The seasonal adjustment contributed to some of the decline.

The non-adjusted price change in the first half of June declined 2.6% compared to May, while the unadjusted price was down 9.1% year over year.

Over the last two weeks, Manheim Market Report (MMR) prices declined an aggregate of 1.8%. Prices in the first two weeks of June typically decline much less.

Over the first 15 days of June, MMR Retention, the average difference in price relative to current MMR, averaged 98.5%, indicating that valuation models remain ahead of market prices.

The average daily sales conversion rate of 54.5% in the first half of June declined relative to May’s daily average of 55.8% and was below the June 2019 daily average of 60.7%.

Maintaining the trend that started in March, all major market segments saw seasonally adjusted prices that were lower year over year in the first half of June.

Only pickups and vans, at 6.2% and 7.8%, respectively, lost less compared to the overall industry in seasonally adjusted year-over-year changes. The remaining segments lost between 9.6% and 12.5%, with sports cars again losing the most.

All major segments also saw price decreases compared to May, with losses ranging from 1.9% to 4.7%. Sports cars were the sole outlier versus the other segments, with a 0.6% gain from May.

Wholesale Supply Lower in Mid-June

Using estimates based on vAuto data as of June 12, used retail days’ supply was 45 days, which was down two days from the end of May.

Days’ supply was down five days year over year but flat compared with the same week in 2019. Leveraging Manheim sales and inventory data, analysts estimate that wholesale supply ended May at 24 days, down one day from the end of April and down one day year over year.

As of June 15, wholesale supply was unchanged from the end of May at 24 days but down one day year over year and down four days compared to 2019.

Used retail supply measured in days’ supply and compared to 2019 suggests supply is about normal for this time of year, but wholesale supply remains tighter than normal.

Rental Risk Prices and Mileage Decline

The average price for rental risk units sold at auction in the first 15 days of June was down 1.6% year over year.

Rental risk prices were also lower by 3.5% compared to the full month of May.

Average mileage for rental risk units in the first half of June (at 57,400 miles) was down 2.3% compared to a year ago and down 2.0% month over month.

Consumer Sentiment Improves

With the risk and uncertainty for the economy resolved with the increase in the debt ceiling in early June, measures of consumer sentiment are improving in June.

The initial June reading on consumer sentiment from the University of Michigan increased 7.9% to 63.9 as views of both current conditions and future expectations increased.

The median expected inflation rate over the next year declined to 3.3% from 4.2% last month, and the longer-term view declined to 3.0%.

Consumers’ views of buying conditions for vehicles improved to the best level since February and were much better than a year ago. Consumers saw improvement in prices and interest rates but still viewed both negatively.

The daily index of consumer sentiment from Morning Consult has increased 1.9% so far in June. The view of the future was the highest since December 2021.