Dec. wholesale used car prices signal end to volatile depreciation swings

For the full month of December, wholesale used vehicle prices reversed course and dipped compared to the previous month.

By the numbers: The Manheim Used Vehicle Index, which tracks prices that car dealerships pay for used cars at auctions, declined 0.8% month-over-month — altogether rising year-over-year by 0.4% — continuing the trend of normalizing vehicle depreciation in 2024 after pandemic-era disruptions.

• Prices in the Three-Year-Old Index fell by 1.3% – with larger declines in the back-half of the much which were in-line with expectations. 

• The average daily sales conversion rate fell to 53.8%, a decline against the full month of November but higher than it has been over the past three years  (~51.9%).

• Manheim Market Report (MMR) Retention, which measures how closely average auction transaction prices align with market value, averaged 99.1%.

What they’re saying:  “Wholesale values declined a bit more than usual right at the end of December, but that was likely influenced some by the holiday calendar,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive. “Overall, 2024 was our most normal year for depreciation trends in the last five years.”

• “Used-vehicle values ended 2024 just about where we expected, but the path was not straight,” said Cox Automotive Chief Economist Jonathan Smoke. “We saw weaker-than-expected price performance in the first half of the year and stronger prices in the second half. But that transition in the middle of 2024 was a key milestone: It appears the period of used-vehicle price correction is over.”

By segment: Compact car sales declined by 1.1% compared to November. Midsize cars were down 0.6% and SUVs followed suit — declining 0.7%. Pickups fell 0.5%, while the luxury segment dropped the most (-1.5%).

Bottom line: With retail supply still light, fewer lease maturities on the horizon next year, and uncertainty around new vehicle tariffs, more typical depreciation trends will likely continue in 2025.

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