Wholesale Used Car Prices Rise

The Manheim Used Vehicle Value Index increased for July vs. June, a rare positive number in a primarily negative string for the past two years.

In response to better new- and used-vehicle availability, new-car incentives and resistance to high prices, wholesale used-vehicle auction prices have been falling relative to historic, pandemic-related highs seen in late 2021 and early 2022.

Specifically, the July Manheim Index, is 201.6. That’s 2.8% higher than June. However, the index is still substantially lower than a year ago, down 4.8% vs. July 2023.

Two years ago, in July 2022, the Manheim Index was 239.6. In January 2022, it was an all-time high of 257.7, tied with December 2021.

The Manheim Index is a single measure designed to track used-vehicle wholesale price changes. It is weighted for a changing mix of product segments and mileage and seasonally adjusted. The index is calculated relative to a starting point: January 1997 equals 100.

Jeremy Robb, senior director of Economic and Industry Insights at Manheim’s parent company, Cox Automotive, describes the July result as a slowdown in the longer-term decline in wholesale values.

Robb says the sales conversion rate at auctions was higher every week in July, translating to higher prices overall. The conversion rate is the percentage of vehicles that sell the first time through the auction lane —at or above the seller’s minimum asking price.

For cars that don’t sell the first time, sellers can withdraw or run them through the auction again at a lower minimum.

Meanwhile, a drop in lease maturities, echoing a drop in lease originations three years ago, is starting to take hold, and Robb says in the Manheim Index announcement that it is likely to support relatively higher wholesale auction prices through the end of 2024.

Dealers prize off-lease vehicles, usually about 36 months old at lease end, as a source of Certified Pre-Owned vehicles. CPO vehicles are reconditioned to factory standards and retailed with a factory-backed warranty on top of any remaining new-car warranty.