Used Vehicle Value Index
By applying statistical analysis to its database of more than 5 million used vehicle transactions annually, Manheim has developed a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold. View the index methodology.
The Manheim Index is increasingly recognized by both financial and economic analysts as the premier indicator of pricing trends in the used vehicle market, but should not be considered indicative or predictive of any individual remarketer's results.
Wholesale Prices Increase Halfway Through September
Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 3.6% in the first 15 days of September compared to the month of August. This brought the Manheim Used Vehicle Value Index to 201.4, a 24.9% increase from September 2020.
Manheim Market Report (MMR) prices saw a strong increase through the first two full weeks of September. The Three-Year-Old MMR Index, which represents the largest model year cohort at auction, experienced a 2.0% cumulative increase over the last two weeks. Over the first 15 days of September, MMR Retention, which is the average difference in price relative to current MMR, averaged 100.8%, which indicates that valuation models are not keeping pace with the increase in market prices. The sales conversion rate increased in the first half of September relative to August and is at an elevated level for this time of year. The latest trends in the key indicators suggest wholesale used vehicle values will likely see further gains in the days ahead.
On a year-over-year basis, all major market segments saw seasonally adjusted price gains through the first 15 days of September. Pickups had the smallest year-over-year gains, while vans had the largest at 40.7%. Compared to August, pickups had the smallest growth in the first half of September, while vans had the largest gains.
Used supply normalizes. Using a rolling seven-day estimate of used retail days’ supply based on vAuto data, we see that used retail supply is now at normal levels at 42 days. Wholesale supply has also improved but remains below normal at 19 days for the most recent seven-day period, when normal supply is 23.
Rental risk pricing declines. The average price for rental risk units sold at auction in the first 15 days of September was up 29.6% year-over-year. Rental risk prices were up 6% compared to August. Average mileage for rental risk units in the first half of September (at 58,994 miles) was up 39% compared to a year ago and down 16% month-over-month.
Auto loan performance deteriorates from abnormally strong levels. Auto loan performance deteriorated in August as declining unemployment benefits and loan accommodations led to increasing severe delinquencies. Equifax estimates that 1.4% of auto loans were in accommodation as of the end of July, which was down from 1.5% four weeks earlier. Relative to the level of accommodation pre-pandemic, approximately 519,000 auto loans did not have payments due in August and had frozen statuses, which prevented them from deteriorating. Even with those loans frozen, delinquencies of 60-plus days increased in August for the third month in a row but were down 1.8% year-over-year. In August, 1.20% of auto loans were severely delinquent, which was an increase from 1.15% in July and the highest severe-delinquency rate in five months. Compared to a year ago, the severe delinquency rate was 1 basis point lower. In August, 4.53% of subprime loans were severely delinquent, which was an increase from 4.36% in July and the highest severe-delinquency rate in five months. Compared to a year ago, the subprime severe-delinquency rate was 18 basis points higher. Loan defaults increased in August and were up 1.9% year-over-year.