Unprecedented recent events have caused the used car market to fluctuate more than it ever has, but the end is supposedly in sight.
Automobile auction firm Manheim, Inc. recently released its Used Vehicle Value Index report, which outlines used vehicle pricing trends across the United States. The Manheim Index is routinely cited by financial institutions and utilized for economic research purposes.
Last year, the Manheim Used Vehicle Value Index (MUVVI) tracked a decrease of seven percent from the beginning to the end of 2023, dropping to 204.0. When you extend that timeframe back to 2021, used vehicle prices have fallen almost 21 percent. While this decrease is good news for consumers, the overall value of used vehicles is still much higher than it was four years ago.
Jeremy Robb, senior director of Economic and Industry Insights for Cox Automotive commented on recent market trends and their unexpected movements: “December’s decline brought a volatile year to a close. The spring bounce was much more pronounced than expected in 2023, and prices slid just as rapidly after that bounce, finishing more calmly in December as expected. The 7.0% year-over-year loss was larger than our original forecast, but it pales in comparison to the nearly 15% decline we had a year earlier. 2024 is looking to be less volatile than 2023, but we’ve been taught to expect the unexpected in the wholesale market.”
Seasonal influences also played a bigger part in the used vehicle market near the end of 2023. The Manheim Market Report (MMR) saw a 1.4 percent decline over the last two weeks of December 2023, compared to a 0.5 percent decline between the years of 2014 and 2019. December also saw a lower-than-usual overall used vehicle average price, sitting at just around 1 percent lower than usual for the time.
Fluctuation between vehicle types was also widespread throughout 2023. Based on trends seen over 2022, pickup trucks, luxury vehicles, and SUVs lost the least amount of value. Compact cars saw the most devastating loss, coming in at just below 12 percent. Mid-size cars also lost quite a bit, averaging about an eight percent loss. All previously mentioned segments are continuing to lose value as well, based on December 2023’s MUVVI report.
With this overall decrease in price, the market is seeing an increase in sales. A 13 percent increase in new vehicle purchases was seen from December 2022 to December 2023, and a huge increase in fleet vehicle sales was reported, with a 72 percent increase within the same timeframe.
As a result of this stabilization, consumer confidence is on the rise as well which bodes well for the automotive market and the economy as a whole. Based on this news, do you think you’ll be buying a used vehicle from a used car dealer in 2024?
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