Wholesale Used-Vehicle Prices Rose in January

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) moved 0.4% higher in January compared to December, causing the Manheim Used Vehicle Value Index (MUVVI) to increase to 205.6, a gain of 0.8% from a year ago. 

The index’s seasonal adjustment muted the month’s movement, as non-seasonally adjusted values rose faster than seasonally adjusted values. The non-adjusted price in January increased by 0.6% compared to December, moving the unadjusted average price up 1.1% year over year.

“While it’s not yet spring, wholesale values increased more than we usually see in January, with particular strength at the end of the month,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotive, in a Feb. 7 news release. “The Manheim index is at the highest point since October 2023, after we experienced stronger-than-usual gains in non-seasonally adjusted values. Currently, retail days’ supply at used dealerships sits nine days lower than last year, and we are just now on the cusp of starting the spring wholesale market.”

In January, Manheim Market Report (MMR) values saw mixed moves over the course of the month. Still, they ended with the last week of January seeing strong price appreciation, with values rising 0.4% in the last week alone. Over the last four weeks, the Three-Year-Old Index increased an aggregate of 0.2%, including a decline of 0.5% in the third week of the month. Those same four weeks delivered an average decrease of 0.1% between 2014 and 2019, indicating depreciation trends were less than we usually experience at this time of the year.

Over the month, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 98.8%, meaning market prices moved away from MMR values this month and were lower against December levels. Compared to last year, valuation models were lower by 0.5 percentage points for MMR retention, and they are eight-tenths of a point lower than 2019 levels for the same period. The average daily sales conversion rate rose to 58.8%, an increase of 5.7 percentage points compared to last month and a little higher than normally seen at this time of year. For comparison, the daily sales conversion rate averaged 54.4% in January over the last three years.

Vehicle Segment Prices

Major market segments saw mixed trends for seasonally adjusted prices year over year in January. Compared to January 2023, luxury was up the most, rising by 2%, with SUVs also up 1.2%. Performing worse than the industry, mid-size sedans were down 1.6%, trucks down 2.1%, and compact cars declined the most, falling by 3.4% compared to last year. 

Compared to the previous month, the luxury segment rose the most, moving higher by 2.7%, while SUVs were up 1.2% in the period. Faring worse than the industry overall, mid-size sedans were down 0.9%, trucks declined 1.8%, and compact cars showed the largest decline, falling 2.1% over the last month.

Looking at the market by powertrain, electric vehicles (EVs) were higher against December, showing their third consecutive month-over-month rise, which was also stronger than the industry average overall. EV values were up 2.1%, while non-EVs rose 0.4% over the same period. 

Seasonally adjusted EV values in January continue to show declines versus the prior year, which are smaller than in previous months. For January 2025, EV values are down 5.1% compared to January 2024, while non-EVs were up 0.3% year over year, a bit lower than the overall industry average.

Retail Used-Vehicle Sales Were Up in January

Assessing retail vehicle sales based on observed changes in units tracked by vAuto, initial estimates of retail used-vehicle sales in January were up 6.2% compared to December and higher year over year by 15%. The average retail listing price for a used vehicle decreased 1.3% over the last four weeks.  

Using estimates of retail used days’ supply based on vAuto data, an initial assessment indicates January ended at 47 days’ supply, down three days from 50 days at the end of December and down nine days from January 2024 at 56 days.

New vehicle sales in January were up 3.8% from last year, yet volume declined 25.7% from a strong December. The January sales pace, or seasonally adjusted annual rate (SAAR), came in at 15.6 million, up 0.6 million from last year’s pace but lower than the strong 16.9 million level in December.

Combined sales into large rental, commercial, and government fleets decreased 0.9% year over year in January. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining new retail sales were estimated to be up 6.6% from last year, leading to an estimated retail SAAR of 12.5 million, up 2.1% from last year’s pace but down from December’s estimated 14 million level. Fleet share was estimated to be 16.4%, down from last year’s 18.7% share.

Rental Risk Price and Mileage Results Remain Mixed Against Last January

The average price for rental risk units sold at auction in January decreased 0.4% year over year. However, rental risk prices rose by 0.8% compared to December. Average mileage for rental risk units in January (at 55,800 miles) rose 23.6% for the month against last year’s level, resulting in the highest mileage seen since July 2023. For January, rental unit average mileage was also higher by 7.9% from December 2024.

Measures of Consumer Confidence Declined in January

• The Conference Board Consumer Confidence Index declined 4.9% in January, which was worse than the small decline expected; but December’s index was revised much higher. Consumers’ views of both the present and the future declined, but the view of the present declined the most. Consumer confidence was down 6.1% yearly, the first yearly decline since September. Plans to purchase a vehicle in the next six months dropped to the lowest level since August but plans to purchase remained higher year over year. 
• The sentiment index from the University of Michigan declined 3.9% in January to 71.1, which was lower than expected as it declined further from the earlier reading at the beginning of the month. With the final monthly decline, the index was down 10% year over year. The underlying views of current conditions and future expectations declined, with expectations falling the most. Expectations for inflation in one year increased to 3.3% from 2.8%, and expectations for inflation in five years increased to 3.2% from 3.0%. Consumers’ views of buying conditions for vehicles declined modestly as views of interest rates deteriorated, but the views of prices were less negative. 
• Morning Consult’s daily consumer sentiment index saw a 0.1% decline in January, ending the previous six-month streak of increases. The 0.1% decline for the month reversed the 0.1% increase in December, leaving sentiment where it was at the end of November. The daily index peaked in mid-January at the best level since March 2020. With the January decline, the index was up 11% yearly.