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Monday, 10 January 2022 22:44

Growth in Used Vehicle Values Expected Through Spring 2022

Written by Vehicle Remarketing Staff
Growth in Used Vehicle Values Expected Through Spring 2022 Cadillac

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Wholesale used vehicle prices---on a mix-, mileage- and seasonally-adjusted basis---increased 1.6% month over month in December to a record high of 236.2, a 46.6% increase from a year ago, according to numbers released Jan. 7 from the Manheim Used Vehicle Value Index.

The non-adjusted price change, however, declined 1.1% from November, leaving the unadjusted average price up 43.4% year over year.

 

“The wholesale auction market began to slow in the final weeks of the year, but prices typically bounce in the spring,” said Cox Automotive Chief Economist Jonathan Smoke in a news release. “We don’t anticipate 2022 will be an exception, especially with record-level tax refunds expected and ongoing inventory challenges.

 

"Unfortunately for consumers, it will be the second half of 2022 before we begin to see normal price depreciation again, barring any further supply chain disruptions. Uncertainty exists around what, if any, impact the Omicron variant will have on supply chain and inventory.”

 

Manheim Market Report (MMR) values saw weekly price decreases in December that accelerated in the final weeks of the month. MMR is a valuation tool used by tens of thousands of consignors and dealers to assess millions of trade-ins each month. MMR is designed to be highly stable and avoid overreacting to short-term market ups and downs and provides an accurate measure of vehicle valuations regardless of market conditions.

 

Over the full four weeks of December, the Three-Year-Old Index declined a net 1.7%. Over the month of December, daily MMR Retention, which is the average difference in price relative to current MMR, averaged 98.3%, indicating market prices were below MMR values.

 

The average daily sales conversion rate also declined in December. At 53%, the conversion rate was close to normal for the final month of the year. The sales conversion rate averaged 52% in December 2019. This indicates the month saw a balance between buyers and sellers, and as a result...


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