Manheim Used Vehicle Value Index Declines Again

Dealers who want to boost their profits, take note: The Manheim Used Vehicle Value Index dropped in May, with electric vehicles declining more than average due to soft demand and price cuts on new EVs.

Seasonally adjusted EV values were down 16% for May 2024 vs. a year ago, while non-EVs were down 11.6%, Manheim says.

The same trend held for May vs. April 2024. The index for EV values fell 2.4% vs. April 2024, while non-EVs declined 1.0% vs. the previous month.

Why is that good news? Consider that in April, Roger Penske, chair and CEO of Penske Automotive Group, said the group makes more money on used EVs than it does on new ones because the new ones require discounting to sell.

Used EV values are down, analysts say separately, in part because of cuts to sticker prices for some new EVs. Other factors for the drop include higher new-vehicle incentives for some models to try and stimulate new-vehicle demand.

New-vehicle price cuts have an immediate matching effect on used values for those same models.

While used values are down, used-EV sales volume at auctions is up as EVs gain share overall. In the first quarter of 2024, Cox Automotive, the parent company of Manheim, reports wholesale auction volume for EVs was about 18,000, up 86% vs. a year ago.

Retail used EV sales volume at new- and used-car dealerships was around 60,000 for the first quarter of 2024, up 48% vs. first quarter of 2023, Cox says in an earlier report.

For May overall, including all powertrains, the Manheim Index for used vehicles sold at dealer-only wholesale auctions continued to follow a long-term downward trend to 197.3, down 12.1% from a year ago.

The seasonally adjusted average wholesale used-vehicle price was $18,048 in May 2024. That’s down 12.1% vs. $20,535 in May 2023, Manheim says.

The Manheim Index is a single measure designed to track 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.