Wholesale Used-Vehicle Prices See Large Increase in February

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) increased 4.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February from January. This was the largest increase for the full month of February since 2009’s 4.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} rise. The Manheim Used Vehicle Value Index (MUVVI) rose to 234.5, down 7.0{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from a year ago. February’s increase was driven partially by the seasonal adjustment. The non-adjusted price change in February was an increase of 3.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} compared to January, moving the unadjusted average price down 5.6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year.

In February, Manheim Market Report (MMR) values saw increases that were not typical, culminating in a 2.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} increase in the Three-Year-Old Index over the last four weeks. Over the month of February, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 100.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, meaning market prices were very close to MMR values. The average daily sales conversion rate increased to 64.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} and was above normal for the time of year. For example, the daily sales conversion rate averaged 55.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in January 2019. The higher conversion rate indicated that the month saw sellers with more pricing power than what is typically seen for this time of year.

All eight major market segments continued to see seasonally adjusted prices that were lower year over year in February. Pickups had the smallest decline at 3.9{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, with compact cars, midsize cars, and vans losing less than the overall industry year over year. Luxury cars, SUVs, and sports cars lost 10.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, 8.6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, and 7.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, respectively, compared to last February. All eight major segments saw significant price increases compared to January, with gains of between 3.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} and 5.9{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}.

Used Retail Vehicle Sales Declined in February

Leveraging a same-store set of dealerships selected to represent the country from Dealertrack, we initially estimate that used retail sales declined 5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February from January and that used retail sales were down 9{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year.

Using estimates of used retail days’ supply based on vAuto data, an initial analysis indicates February ended near 41 days’ supply, down from 48 days at the end of January and 13 days lower than how February 2022 ended at 54 days. Leveraging Manheim sales and inventory data, wholesale supply is estimated to have finished February at 24 days, down two days from the end of January and down five days from how February 2022 ended at 29 days.

February’s total new-light-vehicle sales were up 8.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year, with the same number of selling days as February 2022. By volume, February new-vehicle sales were up 9.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from January. The February sales pace, or seasonally adjusted annual rate (SAAR), came in at 14.9 million, an 8.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} increase from last year’s 13.7 million but down 6.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from January’s revised 15.9 million pace.

Combined sales into large rental, commercial, and government fleets increased 48{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year in February. Sales into rental fleets were up 77{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year, sales into commercial fleets were up 23{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, and sales into government fleets were up 42{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be up 4.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, leading to an estimated retail SAAR of 12.3 million, up 0.5 million from last year’s pace but down 0.9 million from last month’s pace. The fleet market share of 17.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} was a 3.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} gain compared to last year’s share of 14.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} and was a 1.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} increase from last month’s estimated 16.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} market share.

Rental Risk Prices and Mileage Rise Substantially in February

The average price for rental risk units sold at auction in February was up 0.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year. Rental risk prices were up 5.0{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} compared to January. Average mileage for rental risk units in February (at 60,700 miles) was up 2.4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} compared to a year ago and up 8.8{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from January.

Measures of Consumer Confidence Mixed in February

The Conference Board Consumer Confidence Index® declined 2.9{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February, as views of present situation improved but future expectations fell by 8.3{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}. Plans to purchase a vehicle in the next six months fell to the lowest level since November 2021. The confidence index did not decline as much during the pandemic as the sentiment index from the University of Michigan, but that series has improved every month this year. The Michigan index increased 3.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February and was up 6.7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year. Consumers’ views of buying conditions for vehicles declined modestly in February but remained much better than a year ago. The daily index of consumer sentiment from Morning Consult measured improving sentiment in February following a slight decline in January. That index increased 3.2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February as the price of gasoline declined. According to AAA, the national average price for unleaded gas fell 4.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in February to $3.36 per gallon on Feb. 28, down 7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} year over year.

The complete suite of monthly MUVVI data for March will be released on April 7, 2023, the fifth business day of the month, as regularly scheduled. To hear about the latest MUVVI and trends that shaped the quarter, register to attend the Q1 Manheim Used Vehicle Value Index Call on Friday, April 7, at 11 a.m. EDT. If you are observing the Good Friday holiday, a recording of the call will be available in the Newsroom on Monday, April 10.

For questions or to request data, please email [email protected]. If you want updates about the Manheim Used Vehicle Value Index, as well as direct invitations to the quarterly call sent to you, please sign up for our Cox Automotive newsletter and select Manheim Used Vehicle Value Index quarterly calls.

The Manheim Used Vehicle Value Index was adjusted to improve accuracy and consistency across the data set as of the January 2023 data release. The starting point for the MUVVI was adjusted from January 1995 to January 1997. The index was then recalculated with January 1997 = 100, whereas prior reports had 1995 as the baseline of 100. All monthly and yearly percent changes since January 2015 are identical. Read more about the decision to rebase the index and review the index methodology for more details.

Francis McGee

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