Wholesale used-vehicle prices set new records once again in November as consumer demand remained high amid continued inventory shortages.
Cox Automotive’s Manheim Used Vehicle Value Index, which tracks vehicles sold at Manheim’s U.S. auctions, rose 44 percent in November compared with the same month in 2020. The November index increased 3.9 percent from October, according to data released Tuesday. Those numbers were adjusted for mix, mileage and seasonality.
That probably will mark the end of new records for the Manheim index in 2021, Cox Automotive Chief Economist Jonathan Smoke told Automotive News on Tuesday.
“In the weekly numbers, we’ve already seen moderation over the last couple of weeks, which is exactly what we were anticipating,” Smoke said. “So we think November is the peak for the year. Prices are probably going to stay about where they are — or the index is going to stay about where it is — through the end of the year.”
Black Book on Monday reported a new record and a similar surge in its own used-vehicle price index for November. Black Book’s Used Vehicle Retention Index increased to 189.9 points — 45 percent above where it was in November 2020. The index rose 5.4 percent from October, Black Book said.
New-vehicle inventory problems continued to plague dealers, forcing them to spend more money to obtain used-vehicle supplies for their lots. This pushed wholesale prices to new heights across all segments in November, according to Alex Yurchenko, chief data science officer at Black Book.
“Cars of all sizes and vans had the largest increases as used and new inventory in those segments declined to much lower levels compared to other segments of the market,” Yurchenko said in a news release.
Yurchenko said Black Book expects used-vehicle prices to increase again in December but at a much lower rate because the volume of new-vehicle inventory is beginning to level off and consumer demand is softening as a result of record-breaking used prices at retail.
According to Manheim, November’s year-over-year price increase was also 44 percent on a non-adjusted basis. The non-adjusted month-over-month increase in November was 1.9 percent.
Manheim said the daily sales conversion rate dropped to 59 percent in November but remained elevated for this time of year. By contrast, that rate was 52 percent in November 2019. The data suggests buyers were more aggressive than normal buying in the fall but less so than they were in October.
Used-vehicle sales continued on a downward trend, Cox Automotive said, with total used volume down 2 percent year over year in November. It estimated used-vehicle supply at retail to be at 49 days at the end of the month. Normal supply is 44 days. Wholesale supply stood at 29 days at the end of the month. Normal supply is 23 days.