Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.3% month over month in June, after record highs for four consecutive months. This brought the Manheim Used Vehicle Value Index to 200.4, a 34.3% increase from a year ago and a 1.3% decrease from a high of 203 in May.

“After several months of record highs, all indicators now show that wholesale used vehicle prices peaked in early June and have started to decline,” said Cox Automotive Chief Economist Jonathan Smoke. “In June, the Index hit a record high of 203, and we don’t anticipate seeing numbers in the 200s again for likely several years. Based on our data, it’s clear that supply and demand are more in balance and may be tilting slightly to favor buyers. There are still supply constraints and will be for some time, but we anticipate that substantially inflated used vehicle values will erode by 9% between now and the end of 2021.”

Manheim Market Report (MMR) prices saw weekly increases in the first two full weeks of June, but the remaining weeks saw accelerated price declines. MMR is a valuation tool used by tens of thousands of consignors and dealers to assess millions of trade-ins each month. MMR is designed to be highly stable and avoid overreacting to short-term market ups and downs while providing an accurate measure of vehicle valuations regardless of market conditions. Retail prices continued to rise, though at a slower pace, and are expected to peak later this month.

Over the last five weeks, the Three-Year-Old Index declined a net 0.7%. Over the month of May, MMR Retention, which is the average difference in price relative to current MMR, averaged 99%. The sales conversion rate, which peaked in April in the 80s, also slowed as the month progressed and ended the month at a level in the low 50s, much more typical for the month of June.

On a year-over-year basis, all major market segments saw seasonally adjusted price increases in June. Pickup trucks outperformed the overall market, while most other major segments underperformed the overall market.

Source: Vehicle Remarketing

 

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