Dealers continue to watch auction values as they gauge whether it’s affordable to stock up on used vehicles.
Publicly traded, new-vehicle dealership groups say they’re self-sourcing as many used vehicles as possible – that is, from trade-ins and buying vehicles off the street – to avoid auction prices they regard as still too high and still bring in the profits from used-car demand.
That retail used-car revenue may change, as used-car values at wholesale auctions were down in August, making it 12 months in a row auction values fell vs. the same month a year ago, according to the latest Manheim Used Vehicle Value index.
However, the rate of decline was smaller, compared with greater declines in fourth-quarter 2022 and into January 2023, and double-digit percent declines in June and July, according to the recently published index.
By the numbers: the August Manheim Index was 212.2, a bare increase compared with July at 211.7, but down 7.7% vs. August 2022. The corresponding seasonally adjusted average price was $19,412 in August, down from $21,039 a year ago, Manheim says.
While used values are down in general, Manheim doesn’t expect the rate of decline to become more substantial, says Chris Frey, senior manager of economic and industry insights for Manheim parent Cox Automotive.
Stronger-than-expected used sales and tight used-vehicle inventories are factors preventing used-vehicle values from falling further or faster, Frey says.
The Manheim Index is designed to be a single measure that tracks used-vehicle wholesale price changes, weighted for a changing mix of product segments and mileage, and seasonally adjusted. The index is calculated relative to a starting point, where January 1997 equals 100.
