The trend in wholesale vehicle prices in July varied from index to index, but overall prices fell year-on-year, although they are still elevated compared to pre-pandemic levels.
Starting with Black Book, Used Car Retention Index was 145.0 in July, down 1.1% from the previous month and 15.2% from July 2023. However, it was 26.5% higher than the final pre-pandemic reading in March 2020.
“In July, the Black Book Retention Index continued the decline that began in April, driven by a larger-than-expected depreciation in wholesale prices,” said Laura Wehunt, vice president of analysis at Black Book, in an analysis of the index.
“Although auction conversion rates were strong and remained in the high 50 percent range, the retail market experienced an increase in turnaround time, which began at 45 days at the beginning of the month and increased to 52 days by the end,” Wehunt said.
Meanwhile, Cox Automotive Manheim used car value index The number was 201.6 in July, up 2.8% from June and down 4.8% year-on-year (adjusted for mix, mileage and seasonality).
The latter “intensified the impact on the month,” Cox said; unadjusted prices rose 0.6 percent month-on-month and fell 5.9 percent year-on-year.
“The decline in wholesale values slowed in late June, and that trend continued in July as we saw an increase in value throughout the month,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotive, in a Data point Report.
“The sales conversion rate was higher every week of July, which translated into higher overall wholesale-level prices for the month,” Robb said. “We are just now starting to see shorter lease terms for the important 3-year segment, and these impacts will be felt throughout the rest of this year and into 2025 and 2026. As supply tightens for this important segment of the used vehicle market, we expect deviations from historical average depreciation rates.”
In his last Account Comments reportreleased on July 31, ADESA chief economist Tom Kontos — who retires on August 16 — said wholesale prices fell 2.0 percent in June ($14,036) and were down 7.6 percent year-on-year, but “broadly stabilized” last month, standing at $14,023 for the week ended July 21.
And the price of vehicles classified as “new model” rose from $24,827 in June to $25,058 in the week ended July 21, Kontos said in the report.
Although he was talking about pricing and supply in the used car retail market, this point from Kevin Roberts, Director of Industry Insights and Analysis at CarGurus, may be applicable to what’s happening in the wholesale trade as well.
“The shortage of younger used cars is likely to remain a problem in the coming years as new sales have declined during the pandemic-related chip shortage and leasing in particular has declined in recent years,” Roberts said in a company analysis US intelligence report from July 2024.
“One consequence of this shortage is that it could help stabilize used car prices by keeping prices high for newer models, which in turn should prevent a sharp decline in prices for older vehicles.”
