Wholesale Used-Vehicle Prices Declined in March

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were down in March compared to February, according to the Manheim Used Vehicle Value Index (MUVVI) released April 5, which fell to 203.1, a decline of 14.7% from a year ago.

The decline in the index was driven by the seasonal adjustment, resulting in a 0.4% month-over-month decrease. The non-adjusted price in March increased by 3.1% compared to February, moving the unadjusted average price down 11.4% year over year.

In March, Manheim Market Report (MMR) values saw weekly increases slightly below long-term averages for the last several weeks. Over the last five weeks, the Three-Year-Old Index increased an aggregate of 2.1%, including a decline of 0.1% in the last week of the month. Those same five weeks delivered an average increase of 2.5% between 2014 and 2019.

“Our normal spring bump was a bit muted this year, but the wholesale market progress in terms of timing and weekly changes – it was the most normal pattern we’ve seen in some time,” said Cox Automotive Chief Economist Jonathan Smoke, in a news release. “From a historical perspective, we typically see a 3.4% increase in March (non-seasonal) and came up with a 3.1% this year. We expect the market and prices to continue a downward trend – demand is tepid at best, as shoppers just don’t have any urgency to buy in the current economic environment.”

During March, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 99.5%, meaning market prices were below MMR values and falling against February levels, which were 99.9%. The average daily sales conversion rate increased to 62.5%, showing that demand improved relative to February, which is seasonally normal for this time of year. For comparison, the daily sales conversion rate averaged 62% in March during the last three years.

The major market segments saw seasonally adjusted prices that remained lower year over year in March.

• Compared to March 2023, luxury lost less than the industry, down just 13%
• SUVs performed slightly better than the industry, declining 14.4%.
• The worst-performing segment was midsize cars this month, down 17% year over year
• Compact cars were off by 16.8%, and pickups, down 15.4%.

Compared to last month, compact cars gained 0.8%, luxury was up by 0.5%, SUVs increased 0.2%, and midsize cars were down 0.3%, a little better than the industry metric. Trucks were the only segment to decline more than the market overall, falling by 0.6% for the month of March.

With the increase in interest in electric vehicle (EV) values versus the non-EV market, Cox is working on sharing metrics for those segments. Seasonally adjusted EV values for March 2024 were down 19.1%, while non-EVs were down 12.8% year over year. Regarding values against last month, seasonally adjusted EV values decreased substantially, falling by 5.3% from February 2024, while non-EVs were flat over the same period.

Retail Used-Vehicle Sales Increased in March

Assessing retail vehicle sales based on observed changes in units tracked by vAuto, Cox estimates that retail used-vehicle sales in March were up 6% compared to February and higher year over year by 7%. The average retail listing price for a used vehicle was flat over the last four weeks.

Using estimates of retail used days’ supply based on vAuto data, an initial assessment indicates March ended at 42 days’ supply, down five days from 47 days at the end of February but the same level as March 2023 at 42 days.

March’s total new-light-vehicle sales were up 4.6% year over year. By volume, March new-vehicle sales were up 16.1% month over month. The March sales pace, or seasonally adjusted annual rate (SAAR), came in at 15.5 million, an increase from last March’s 14.9 million pace but down from February’s downwardly revised 15.7 million level.

Combined sales into large rental, commercial, and government fleets declined 0.2% year over year in March. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be up 7.1% from last year, leading to an estimated retail SAAR of 13 million, up 1 million from last year’s pace, and up from February’s 12.8 million level. Fleet market share was estimated to be 17.7%, down from last year’s 19.6% share.

Rental Risk Prices Mixed; Mileage Dropped in March

The average price for rental risk units sold at auction in March declined 9.6% year over year. Rental risk prices increased by 1.8% compared to February. Average mileage for rental risk units in March (at 52,500 miles) continues to be down compared to a year ago, declining by 19% against March 2023. Mileage for units in March was up 12.4% from February.

Most Measures of Consumer Confidence Saw Declines in March

• The Conference Board Consumer Confidence Index declined 0.1% in March, as views of the present situation improved but views of the future declined. Consumer confidence was up 0.7% year over year. Plans to purchase a vehicle in the next six months increased slightly but were flat year over year.
• According to the sentiment index from the University of Michigan, consumer sentiment improved in March. The Michigan index increased 3.8% for the month and was up 28.1% year over year. The median consumer expectation for inflation in a year declined to 2.9%, and the expectation for five years fell to 2.8%. The consumer’s view of buying conditions for vehicles increased to the highest level since June 2021 as views of interest rates were less negative.
• The daily index of consumer sentiment from Morning Consult increased in March and left the daily index up 14.3% year over year. Morning Consult surveys many more consumers over the full course of the month. The daily index increased 0.3% from the end of February.
• Gas prices increased in March. The national average price for unleaded gas from AAA increased 6.2% from the end of February to $3.54 per gallon as of March 31, which was up 1% year over year.