Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 0.3% from November in the first 15 days of December, according to the midmonth Manheim Used Vehicle Value Index released Dec. 19.

The index rose to 205.5, which was down 6.3% from the full month of December 2022. The seasonal adjustment largely drove the increase. The non-adjusted price change in the first half of December dropped 1.1% compared to November, while the unadjusted price was down 6.8% year over year.

Over the last two weeks, Manheim Market Report (MMR) prices declined an aggregate of 0.7%, which was more than the normal decline of 0.2% for the time of year. Over the first 15 days of December, MMR Retention, the average difference in price relative to current MMR, averaged 99%, indicating that valuation models are ahead of market prices. The average daily sales conversion rate of 54.7% in the first half of December was above the December 2019 daily average of 52.2%. The conversion rate indicates that the first 15 days of the month saw stronger-than-normal buying demand for this time of year.

All major market segments saw seasonally adjusted prices that remained lower year over year in the first half of December. Compared to the industry’s year-over-year decline of 6.3%, SUVs lost less at 5.4%, and pickups lost 5.9%. Continuing the trend, compact cars were down 11.4%, midsize cars were off by 7.6%, and vans lost 6.7% year over year. Luxury was flat compared to the industry, down 6.3%. Most major segments saw improved or flat price performance compared to November, with vans, SUVs, and midsize cars up 0.6%, 0.5%, and 0.4%, respectively. Luxury was flat compared to the industry, both rising 0.3% from November. Compact cars and pickups, down 0.3% and 0.1%, were the only negative month-over-month performers.

Wholesale Supply Unchanged Month Over Month

Leveraging Manheim sales and inventory data, we estimate that wholesale supply ended November at 30 days, up one day from the end of October and flat year over year. Wholesale supply is tighter than normal for this time of year and is down two days compared to 2019.

Rental Risk Prices Declined in First Two Weeks of December

The average price for rental risk units sold at auction in the first 15 days of December was down 6% year over year. Rental risk prices were down by 4.2% compared to the full month of November. Average mileage for rental risk units in the first half of November (at 47,700 miles) was down 9.9% compared to a year ago but up 1.7% month over month.

Consumer Sentiment Improves in December

• The initial December reading on Consumer Sentiment from the University of Michigan jumped 13.2% to 69.4, as views of both current conditions and future expectations increased. Worries about inflation fell as the median expected inflation rate over the next year declined to 3.1% from 4.5% last month, and the longer-term view of inflation declined to 2.8% from 3.2%. That five-year view of inflation was the lowest in more than a year and is encouraging as it suggests consumers are not anchoring to a persistent level of higher inflation. Consumers’ views of vehicle-buying conditions improved to the best level since August.

• The daily index of consumer sentiment from Morning Consult points to less substantial improvement in December. As of Dec. 16, that index has increased 2.7% in December.

• The improvement in consumer sentiment in December aligns with average gas prices’ declining 5.5% so far this month to the lowest price since June 2021.