Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were higher in August compared to July, according to the Manheim Used Vehicle Value Index (MUVVI), which rose to 203.9, a decline of 3.9% from a year ago.

The seasonal adjustment to the index eased the impact on the month, resulting in values that rose 1.2% month over month. The non-adjusted price in August increased by 2.2% compared to July, moving the unadjusted average price down 4.6% year over year.

“The trend of higher wholesale values at Manheim continued into August from July, as we saw prices appreciate every week except the last,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotive, in a Sept. 9 news release. “Sales conversion continued to rise and held at much higher levels than prior years for the month as more buyers came to markets to replenish supply for used retail inventory. We know lease maturities are on the decline, and used retail days’ supply has tightened over the last month. That will likely keep pressure on buyers at Manheim in the next several weeks.”

In August, Manheim Market Report (MMR) values saw weekly increases every week of August except the last week, clearly higher than what is normal in the month. During the previous five weeks, the Three-Year-Old Index increased an aggregate of 0.8%, including a decline of 0.2% in the last week of the month. Those same four weeks delivered an average decrease of 1% between 2014 and 2019, illustrating that the appreciation trend for the month of August contrasted against long-term averages for the year.

In August, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 98.9%, meaning market prices stayed below MMR values again this month yet moved closer to market valuations for the second month in a row. Compared to last month, valuation models moved up three-tenths of a point on MMR retention. The average daily sales conversion rate rose to 63.3%, a rise of over 4 full points against last month and higher than normal for this time of year. For comparison, the daily sales conversion rate averaged 55.7% in August over the previous three years.

Major Vehicle Market Price Movements

All major market segments experienced seasonally adjusted prices that were down year over year in August, with clearly slowing patterns in market depreciation over the last two months.

• Compared to August 2023, luxury was lower by only 2.9%

• Midsize sedans declined by 3.9%, outpacing the industry overall.

• SUVs were down 4.3%

• Pickups fell by 5.5%

• Compact cars declined 5.6% against the prior year

Compared to the previous month, all segments were higher, with luxury rising the most, up 3.5%, followed by midsize sedans at 1.6% higher. Increasing less than the overall average, SUVs rose by 1.1%, and pickups were up just 0.3%, with compacts increasing the least, rising by only 0.2% month over month.

Looking at the market by powertrain, both electric vehicles (EVs) and non-EVs were higher compared to July. Seasonally adjusted EV values for August 2024 were down 7.2% year over year, while non-EVs were down only 3%, highlighting the higher depreciation EVs have seen over the last 12 months. Looking at the change against July, seasonally adjusted EV values increased more than the overall market, rising by 4.4% from July 2024, while non-EVs increased 1.8% over the same period.

Retail Used-Vehicle Sales Increased in August

Assessing retail vehicle sales based on observed changes in units tracked by vAuto, the initial estimate of retail used-vehicle sales in August was up 34% compared to July and higher year over year by 21%. The average retail listing price for a used vehicle increased 1.6% over the last four weeks.

Using estimates of retail used days’ supply based on vAuto data, an initial assessment indicates August ended at 38 days’ supply, down 16 days from 54 days at the end of July and down eight days from August 2023 at 46 days.

New-vehicle sales in August were up 7.6% from last year, and volume increased 11.2% from July. The August sales pace, or seasonally adjusted annual rate (SAAR), came in at 15.1 million, down 0.2 million from last year’s pace and lower than July’s 15.8 million level.

Combined sales into large rental, commercial, and government fleets decreased 21% year over year in August. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining new retail sales were estimated to be up 7.6% from last year, leading to an estimated retail SAAR of 12.7 million, down 0.1 million from last year’s pace, and down from July’s estimated 13.1 million level. Fleet share was estimated to be 11.6%, down from last year’s 16.4% share.

Rental Risk Prices and Mileage Were Mixed in August Against Last Year

The average price for rental risk units sold at auction in August declined 1.7% year over year. Rental risk prices increased by 2% compared to July. Average mileage for rental risk units in August (at 54,700 miles) was unchanged month over month, yet it rose 4.8% for the month against last year’s level.

Measures of Consumer Confidence Increased in August

• The Conference Board Consumer Confidence Index increased by 1.4% in August as views of the present and future improved. Consumer confidence was down 5% year over year. Plans to purchase a vehicle in the next six months declined compared to July to the lowest level since February and were lower than August last year.

• According to the sentiment index from the University of Michigan, consumer sentiment increased 2.3% in August compared to July but was down 2.2% year over year. The median consumer expectation for inflation in a year declined to 2.8%, the lowest level since December 2020. The expectation for inflation in five years was steady at 3%. The consumer’s view of buying conditions for vehicles was unchanged from June and at the lowest level since December 2022 as views of interest rates and prices remained very negative.

• The daily index of consumer sentiment from Morning Consult saw further improvement in August, extending a streak of three monthly gains, although it lost some momentum at month-end. The index increased 0.3% for the full month, leaving it up 4.9% year over year.

• Gas prices declined 4.3% in August as the national average price for unleaded gas from AAA was $3.33 per gallon as of Aug. 31, which was down 13% year over year.