Wholesale used-vehicle prices, on a mix-, mileage- and seasonally adjusted basis, decreased 0.59% month over month in December, putting the Manheim Used Vehicle Value Index to 161.1, a 14.2% gain from a year ago.
Manheim Market Report (MMR) prices declined each week over the four full weeks of December, resulting in a 2.2% cumulative wholesale price decline on the Three-Year-Old Index. In the last full week of December, the Three-Year-Old Index declined 0.6%, a larger than average decline for the final week of the year.
MMR retention, which is the average difference in price relative to current MMR, averaged 99.4% in December. The sales conversion rate averaged 51% over the month, a decline from November and relatively low for this time of year.
On a year-over-year basis, most major market segments saw seasonally adjusted wholesale price increases in December. Luxury cars and pickup trucks outperformed the overall market, while most other major segments underperformed the overall market.
"It is clear that there has been a material step change in used vehicle values whether you look at it from a pure price trend or we gauge used values against new," said Cox Automotive Chief Economist Jonathan Smoke. "It will be important going forward to assess if at any point this might imply a correction could happen when the imbalance is no longer so heavily weighted towards demand.
"As we expected, what we have been seeing so far shows no evidence of a correction or one on the horizon," Smoke said. "Supply remains tight, and demand remains strong despite some softening this fall. While January is a bit of a wild card for the economy, as we get closer to the spring, conditions look to be very favorable for used vehicle values."
U.S. Vehicle Sales
According to Cox Automotive estimates, the total used-vehicle sales volume in December was down 5% year over year. The December used-vehicle SAAR is estimated at...