Wholesale car prices slide in Oct. as used retail sales accelerate

Wholesale used vehicle prices declined slightly in October, falling 1.9% compared to the previous month.

By the numbers: The Manheim Used Vehicle Index, which tracks prices that car dealers pay for used cars at auctions, marked its second month on the decline after prices rallied for most of Summer, according to Cox Automotive.

• From Oct. to Nov, prices in the Three-Year-Old Index fell by 2%. Depreciation rates for this time of year are moving more slowly compared to pre-pandemic norms.

• The average daily sales conversion rate dropped 1.8 points from September to 57.4%. Despite the decline, that is still a significantly higher rate than the 2021-2023 average of 52.1%.

• Manheim Market Report (MMR) Retention, which measures how closely average auction transaction prices align with market value, averaged 98.6%, virtually flat compared to Sept.

By segment: Compact car sales were relatively flat compared to Sept., while midsize cars improved by 0.5%. SUV sales fell 0.9%, faster than the rest of the industry. Pickups were mostly unchanged from the previous month, gaining just 0.1%. Luxury sales fell 1.2%.

What it means: The long-term view suggests wholesale values will continue trending downward although at a slower rate. This trend appears to coincide with an increase in used vehicle retail sales, which initial estimates indicate are up 2% month-over-month and 11% year-over-year.

Bottom line: Oct. was an unusual month for the pre-owned segment, conflicting with post-pandemic trends for the last few years. That said, it appears wholesale prices are still normalizing, giving sales a slight edge in the final stretch of 2024.

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