Wholesale used-vehicle prices declined slightly in the first half of July, but don’t be surprised if that changes as consumers buy vehicles – especially electric vehicles – before some tax incentives fall away and proposed tariffs kick in.

According to Cox Automotive, wholesale prices – adjusted for mix, mileage and seasonality –dipped 0.7% from June levels in the first 15 days of July. The Manheim Used Vehicle Value Index (MUVVI) registered 206.9 mid-month, a 2.6% increase year-over-year, though the seasonal adjustment made July’s pricing appear weaker than it actually is.

“Price appreciation trends against last year are starting to moderate as we enter Q3, a time that showed stronger pricing than normal for wholesale markets last year,” Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive, says in a statement.  “However, wholesale supply is quite a bit tighter than last year, so supply and demand are well balanced currently.”

More Depreciation Than Normal

The 1.6% non-adjusted drop in prices was sharper compared to June. Historically, July sees a 0.7% decline for the full month, suggesting early July’s depreciation is heavier than usual, reports Cox.

Year-over-year, however, unadjusted prices are still up 2.8%, though that reflects an unusually hot July 2024 market, making current comparisons appear softer.

The average daily sales conversion rate – the percentage of vehicles sold relative to inventory – dropped to 54.9% in early July, down from 57.8% in June and lower than July 2024’s 57.0%. Cox analysts say that dip signals a modest cooling in wholesale demand.

Dealer Takeaways: Trucks Up, EVs Leading Gains

For franchised and independent dealers navigating inventory acquisition, segment performance varied:

• Trucks were a bright spot, rising 0.5% from June and up 0.8% year over year.
• Luxury vehicles posted the highest annual gain at 5.6% but slipped 1.4% month over month.
• Compact cars continue to underperform, down 4.0% from last year and 0.7% since June.
• Electric vehicles (EVs) surged 6.8% year over year but dropped 2.1% compared to June – a sign of volatility in EV valuations.

Inventory Remains Tight

Wholesale supply continues to favor sellers. As of July 15, supply stood at 25 days – unchanged from the end of June and three days lower than the same time last year. That’s also about two days below typical levels for mid-July.

Lower supply could help support prices as dealers look ahead to supply shortages, high interest rates and consumers’ financial skittishness.