Used-Vehicle Values Expected to Normalize in 2023 After Record Volatility

  • After an unprecedented rally in 2021, wholesale used car prices cap off 2022 with the longest and steepest decline in a year.
  • The sharp drop in wholesale auction prices is the culmination of three years of volatility, preceded by a record rise in 2021.
  • Forecasts for 2023 include a balanced second-hand market, a modest increase in new sales, and record EV sales at both the retail and wholesale levels.

Atlanta, January 9, 2023 /PRNewswire/ — Following a record rise in 2021, the Mannheim Used Vehicle Value Index (MUVVI) ends 2022 at 219.3, up slightly from November due to seasonal adjustments, but 14.9 year-on-year % decreased. This was his biggest decline in less than a year in the history of the series.

On the unadjusted side, the price movement in December was down 1.9% compared to November, and the average unadjusted price was down 13.1% year-on-year. December wholesale used car prices (on a mix, mileage and seasonally adjusted basis) were up 0.8% from November.

“There’s no denying that 2022 will culminate in an unprecedented MUVVI decline, but it’s important to look at the big picture,” said Cox Automotive’s chief economist. Jonathan Smoke“The last three years have been very volatile for the market and these declines follow record gains. December 2021, up 47% year-over-year. A return to pre-pandemic levels is unlikely, but all indicators point to reaching equilibrium in the second half of 2023.”

Mannheim Market Report Values ​​See Fall
In December, Mannheim Market Report (MMR) values ​​fell more than usual, with the 3-year-old index dropping a total of 2.2% over the past four weeks. MMR is a valuation tool used by tens of thousands of vehicle shippers and dealers to evaluate millions of trade-ins each month. It is highly stable and designed not to be overly responsive to short-term market ups and downs so that it can accurately measure a vehicle’s valuation regardless of market conditions.

During December, daily MMR retention, the average difference in price to current MMR, averaged 98.6%, meaning the market price was below the MMR value. His average daily sales conversion rate rose to 50.7%, but remained below average for this time of year. For example, the average daily sales conversion rate was 52.2%. December 2019A low conversion rate indicates that the month saw more buyers with more bargaining power than is typically seen at this time of year.

Across all eight major market segments, December’s seasonally adjusted prices were again below the previous year’s levels. Vans showed the smallest decrease at 12.0%, followed by pickups, sports cars and compact cars at 12.2%, 12.6% and 13.5% respectively. His four other segments were priced lower than the industry. Compared to November, two of the eight major segments underperformed. Medium-sized cars fell by 0.3%, and small cars by 0.2%. Five of the remaining six segments rose between 0.4% and 2.2%.

Pre-owned retail sales decline in December, reverting to 2021 pattern
Leveraging the same set of dealers in the same stores that Dealertrack has selected to represent the country, initial estimates show that second-hand retail sales in December were down 7% from November, while second-hand retail sales were down from November’s results. It decreased by 10% compared to the previous year, reflecting the

Using vAuto’s data-based estimates of used retail days of inventory, December ended with 52 days of inventory, down from 54 at the end of November, but December 2021 Ends in 51 days. Leveraging Mannheim’s sales and inventory data, wholesale supply is estimated to have ended in December at 31 days, with an increase of 2 days from the end of November and 5 days from 26 December 2021. increase.

Last month’s total sales of new minicars were up 4.9% year-on-year, with sales days remaining the same as the previous month. December 2021December new car sales increased 12.2% from November. December sales pace, or seasonally adjusted annual rate (SAAR), was 13.3 million, up 4.7% from 2021’s 12.7 million, but down 6.3% from November’s revised pace of 14.2 million.

Combined large rental, commercial and government sales increased 47% year-over-year in December. Sales to rental vehicles increased 100% year over year, sales to commercial vehicles increased 29%, and sales to government agencies increased 13%. Including estimates of fleet deliveries to dealer and manufacturer channels, remaining retail sales are estimated to be up 1.1% year-over-year, leading to an estimated retail SAAR of 12 million, down 0.5 million from last month’s pace, or down 4.7%. I was. However, it has increased by 800,000 or 7.2% since last year. Fleet share was 14.2%, down 1.5% from last month and up 3.3% from last year.

Rental risk prices fall in December
The average price of rental risk units sold at auction in December was down 5.3% year-on-year. Rental risk prices fell 3.4% compared to his November. Average rental risk unit mileage (55,700 miles) in December decreased 18.7% year-over-year, but increased 3.1% from November.

Predictions and prospects for the used and wholesale car market in 2023
Second-hand car prices have fallen more than average for two years in a row. After past gains in 2020 and 2021, followed by above-average declines for much of 2022, used car values ​​are set to see a year of more-than-normal declines, especially in the first half of his 2023. may become. later this year as constrained wholesale supply supports used prices and used retail prices fall into their normal relationship with new prices. The Mannheim Used Car Price Index is forecast to fall 4.3% in 2018 compared to the previous year. December 2023.

Mannheim poised to set electric vehicle sales record in 2023, prepares for upcoming EV influx
More than 1 million new electric vehicles are expected to be sold usa Set a record this year. Mannheim’s sales generally reflect new car sales, with a lag of about three to four years, and the company has been preparing for an increase in his EV sales for several years.

In 2021, Mannheim will almost $100 million Provide a more connected customer experience through facility, innovation and process improvements. EV infrastructure and initiatives were a key part of this investment. Ongoing efforts include Battery Health Score, trusted by Mannheim and Cox Mobility, poised to lead the industry in battery health and safety device measurements, and training of 850 EV technicians I’m here.

By the third quarter of 2022, Mannheim has processed 144,000 EV and hybrid units. This corresponds to approximately 3.0% of the volume. There are over 700 chargers at 67 locations in Mannheim, serving around 16,000 EVs on auction lots every day.

Mannheim used car price index re-indexed in 1997
The December update adjusted the Mannheim Used Car Price Index to improve accuracy and consistency across the data set. The starting point for MUVVI is January 1995 The exponent was then recalculated as follows: January 1997 = 100. Previously he reported that 1995 was a 100 baseline. All monthly and yearly rates of change are identical. Only the starting point of the index was adjusted.

To download additional commentary and data on Cox Automotive’s Mannheim Used Car Value Index, please visit the Cox Automotive Newsroom.

About Mannheim
Mannheim® is the nation’s leading provider of end-to-end wholesale vehicle solutions, helping dealers and commercial customers improve the profit and efficiency of their used vehicle business. Through physical, mobile and digital sales networks, Mannheim provide services for decision, trading, floorplanning, logistics, warranties, and realignment. Operates one of the largest automobile wholesale markets, Mannheim Clients can choose when and how to connect and transact business. We provide about 8 million used cars annually, Mannheim Team members help the company facilitate deals that represent nearly everything $80 billion by value.Head office location Atlanta, Mannheim North America Cox Automotive™ brand. For more information, see:

About Cox Automotive
Cox Automotive Inc. makes it easy for everyone to buy, sell, own and use cars. Over 27,000 team members and a family of brands in a global company. auto trader®, Dealer.Com®, dealer truck®, Kelly Blue Book®, Mannheim®, next gear Capital®, Vin Solutions®, vCar®, and Xtime® is passionate about helping millions of car shoppers, 40,000 auto dealer clients on five continents, and many others across the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of privately owned Cox Enterprises Inc. AtlantaNearly annual revenue $20 billion.

Source Cox Automotive

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