Manheim released their Used Vehicle Value Index for December 2022 recently.
Manheim, a subsidiary of Cox Automotive, reports “In December, Manheim Market Report (MMR) values saw larger-than-normal declines, culminating in a 2.2% total decline in the Three-Year-Old Index over the last four weeks. Over the month of December, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 98.6%, meaning market prices were below MMR values. The average daily sales conversion rate increased to 50.7% but remained below normal for the time of year. For example, the daily sales conversion rate averaged 52.2% in December 2019. The lower conversion rate indicated that the month saw buyers with more bargaining power than what is typically seen for this time of year.”
The 2019-2020 COVID-19 pandemic is still affecting the car market, resulting in rapidly dropping car values, indicating a perfect time to invest in the car market.
As such, December’s report does show promise for the car market as a whole:
“December’s total new-light-vehicle sales were up 4.9% year over year, with the same number of selling days as December 2021. By volume, December new-vehicle sales were up 12.2% from November. The December sales pace, or seasonally adjusted annual rate (SAAR), came in at 13.3 million, a 4.7% increase from last year’s 12.7 million but down 6.3% from November’s revised 14.2 million pace.”
As always, consumers are the industry’s focus:
“Measures of consumer confidence higher in December. The Conference Board Consumer Confidence Index® increased 6.8% in December, as both present situation and future expectations measures improved. Plans to purchase a vehicle in the next six months improved slightly and remained up year over year. The confidence index has not declined as much this year as the sentiment index from the University of Michigan, but that series also improved in December. The Michigan index increased 5.1%, driven primarily by improvement in the expectations index, which was up 7.7%. Consumers’ views of buying conditions for vehicles improved to the second-best level this year. The daily index of consumer sentiment from Morning Consult also measured improving sentiment in December, as that index was up 4% for the month. Sentiment improved in December as the price of gasoline fell to its lowest level in more than a year before increasing slightly at month’s end. According to AAA, the national average price for unleaded gas was $3.21 per gallon on Dec. 31 and down 2% year over year.”
Source: Cox Automotive’s Manheim’s Used Vehicle Value Index: Used Vehicle Value Index