Wholesale used-vehicle prices tumbled once again in September, marking another month of cumulative price declines that have defined the wholesale market in 2022.
Cox Automotive said Friday that wholesale prices declined 3 percent in September compared with August. The Manheim Used Vehicle Value Index — an indicator of used-vehicle market pricing trends — declined from 210.8 in August to 204.5.
Cox Automotive reported prices were 0.1 percent lower in September than the same time last year when the index stood at 204.8. It’s the first time since May 2020 wholesale values declined year-over-year, according to Cox Automotive. Those numbers are adjusted for mix, mileage and seasonality.
On a nonadjusted basis, the index fell 2.1 percent in September from its August level, with prices down 2.3 percent year-over-year.
“Vehicles are once again depreciating assets,” Cox Automotive Chief Economist Jonathan Smoke said in a news release. “As we look at the cumulative declines this year, we are down significantly and now expect to finish the year down nearly 14 percent in December.”
Cox Automotive hasn’t seen “declines like this” since the onset of the pandemic and the beginning of the Great Recession, Smoke added.
Wholesale prices declined in the first quarter of 2022, then continued falling on a milder scale in the second. But depreciation picked up steam and became “a bit more accelerated the last two months,” said Chris Frey, Cox Automotive’s senior manager of economic and industry insights.
“Our expectation is that depreciation over the next three months will be slower and lower than what we’ve just seen this past quarter,” Frey said Friday, during a quarterly call discussing the Manheim Used Vehicle Value Index results.
Used-retail sales took a hit, falling 8 percent in September from August. Sales were down 10 percent compared with September 2021 and down 18 percent from September 2019, according to Cox Automotive.
Average wholesale prices for 3-year-old vehicles, the largest model year cohort at Manheim’s auctions, fell 2.5 percent during the last four weeks.
Cox estimated used-vehicle retail supply stood at 48 days at the end of September. That was down from 51 days at the end of August but up from 41 days in September 2021. Wholesale supply ended September at 27 days, down one day from August but higher than 19 days in September 2021.
Black Book, which maintains a second indicator of wholesale pricing trends — the Used Vehicle Retention Index — also said the market saw continued declines through September.
That index fell 4.1 percent in September from August. It lost 7.5 points, falling to 176.5 points in September, Black Book said Wednesday. But it reported that the September index number is still up 4.1 percent from where it was in September 2021 and up 54 percent from where it was in March 2020.
Wholesale prices for the 2- to 8-year-old vehicle segments that make up the index fell further in September to reach nearly 1 percent per week, Black Book Chief Data Science Officer Alex Yurchenko said in a news release.
“We expect wholesale prices to continue their decline through the last quarter of 2022 at a slightly lower rate compared to September,” Yurchenko said. “Used retail prices also began modest declines in the last several weeks.”