Used-car supply improves; prices likely to slow in 2nd half of June
There wasn’t any movement in wholesale vehicle prices in the first half of June, but signs are pointing to the second half seeing some slowdown.
That’s according to Cox Automotive’s analysis around its mid-month Manheim Used Vehicle Value Index.
The index remained at 222.7, same as May, and 11.1% higher year-over-year, when adjusting for mix, mileage and seasonality.
Unadjusted, values were down 0.3% month-over-month, with the year-over-year increase at 12.4%.
“The last full two weeks covered the end of May, the Memorial Day holiday, and only the first 11 days of June, so the weekly trends were not as aligned with the half-month performance as is typically the case,” Cox Automotive said in the analysis.
“Over the last two weeks, Manheim Market Report (MMR) prices saw accelerating declines. Over that time, the Three-Year-Old MMR Index, which represents the largest model-year cohort at auction, experienced a 0.6% cumulative increase,” the company said.
“Over the first 15 days of June, MMR Retention, which is the average difference in price relative to current MMR, averaged 98.8%, which indicates that valuation models are slightly ahead of market prices.”
The first half of June has generated a 53.1% average daily sales conversion rate, compared to 55.3% in May. June’s conversion rate has been lower than typical, Cox said.
Offering more analysis, Cox said: “The latest trends in the key indicators suggest wholesale used-vehicle values should see declines in the second half of the month.”
That likely comes as good news for dealers looking to secure used-car inventory, and so should this: both retail and wholesale supply is normalizing.
Cox said that retail days’ supply of used cars was at 45, according to vAuto data from June 13. That is down from 46 at the end of May, but up from 38 in June 2021.
Meanwhile, citing Manheim data, Cox estimates wholesale days’ supply was at 25 on Wednesday, compared to 24 at the end of May and 20 in June 2021.