Wholesale used vehicle prices fell in February, further evidence that a month-long rise in prices is running out of steam.
Cox Automotive said Monday that its Manheim Used Vehicle Value Index, which tracks vehicles sold at Manheim’s U.S. auctions, fell 2.1% in February from January. This is the first decline it has recorded since August.
But February prices remained nearly 37% higher than the year-ago period. These numbers have been adjusted for mix, mileage and seasonality. On an unadjusted basis, the Manheim index fell 2.2% from its January level and was up 32% year-over-year, according to Manheim.
Used retail sales rose 3% from January to February, but did not show the typical seasonal increase due to tax refunds, Cox Automotive said. Only 17% of 2022 tax refunds were issued, while 38% were distributed the same week in 2019, according to Cox, who pulled these statistics from the IRS.
The average tax refund is up 13% year over year, and more refunds issued will drive strong demand for used vehicles, Cox predicted.
Average wholesale prices for 3-year-old vehicles fell 2.6% for the month as a whole, he said.
Cox also estimated used retail supply to be 55 days in mid-February, higher than the mid-February 2021 average of 48 days. Wholesale supply ended February at 28 days, up from 25 days in February 2021.
black book index
Black Book’s used vehicle retention index also fell from January to February, the first time since last summer.
The index fell to 193 points in February, down 4 points from its January level, Black Book said last week. The index is up 68% from February 2021 and 46% from February 2020.
According to Alex Yurchenko, director of data science at Black Book, Black Book reported that February wholesale prices were down in all segments except for full-size and compact vans. This resulted in a decrease in the seasonally adjusted overall monthly retention index, Yurchenko said in a press release.
So far, the fiscal season increase in retail demand is lower than in a typical pre-pandemic year, he said.
“We still expect the rate of price decline to slow in May with possible appreciation in some segments as the spring buying market arrives,” Yurchenko said.