Manheim index registers first year-over-year decline in 33 months
The Manheim Used Vehicle Value Index did something in October that Cox Automotive analysts determined the wholesale market metric had not done in 33 months.
For the first time since January 2017, the index posted a year-over-year decline.
Manheim determined wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 0.29% month-over-month in October. That movement brought the index to 140.3. However, the October reading also represented a 0.4% decrease from a year ago, and halting that 33-month streak.
“Weekly Manheim Market Report (MMR) prices continued to exhibit an accelerating depreciation pattern that began in September and peaked midway through October,” Cox Automotive analysts said in their latest index update.
They indicated 3-year-old vehicle values in aggregate were down 4% for the month, when prices normally decline by 1.5% to 2%.
“The above-average depreciation trend occurred in all major market segments,” Cox Automotive said. “As a result of this higher depreciation, prices in aggregate relative to the beginning of the year are now lower than either of the last two years.”
On a year-over-year basis, analysts noticed most major market segments saw seasonally adjusted price declines in October. Luxury cars outperformed the overall market, gaining 1.5%, while most other major segments underperformed the overall market. Compact cars paced the decreases with a drop of 6.1%, followed by vans at 5.3% and pickups at 2.4.
Midsize cars (down 1.6%) and SUVs/CUVs (down 1.4%) posted similar movements.
“Last year, especially October, continues to be a tough comparison for prices as we reached a record in the Manheim Index because of abnormally strong consumer demand in the fall related to tariff fears and rising interest rates,” Cox Automotive said.
“A year ago, dealers were willing to spend a record amount for used-vehicle inventory to take advantage of very strong new and used-vehicle demand,” analysts added.
Cox Automotive also mentioned price declines within rental-risk units.
Analysts determined the average price for rental risk units sold at auction in October softened 1.6% year-over-year. Rental risk prices dropped 4.8% compared to September.
Cox Automotive added that the average mileage for rental risk units in October (at 48,100 miles) was up 3% compared to a year ago and up 2% month-over-month.