Wholesale used-vehicle prices dipped in February, more evidence that a monthslong elevation in prices is faltering.
Cox Automotive said Monday that its Manheim Used Vehicle Value Index, which tracks vehicles sold at Manheim's U.S. auctions, fell 2.1 percent in February compared with January. That is the first decline it has recorded since August.
But February prices remained almost 37 percent higher than they were in the year-earlier period. Those numbers were adjusted for mix, mileage and seasonality. On a nonadjusted basis, the Manheim Index fell 2.2 percent from its January level and rose 32 percent year over year, according to Manheim.
Used retail sales rose 3 percent from January to February but didn't show a typical seasonal increase driven by tax refunds, Cox Automotive said. Only 17 percent of 2022 tax refunds have been issued, whereas 38 percent had been distributed by the same week in 2019, according to Cox, which pulled those statistics from the IRS.
The average tax refund is up 13 percent year over year, and more refunds being issued will drive strong demand for used vehicles, Cox predicted.
Average wholesale prices for 3-year-old vehicles fell 2.6 percent for the full month, it said.
Cox also estimated that used retail supply was at 55 days in mid-February, higher than February 2021's midmonth average of 48 days. Wholesale supply ended February at 28 days, up from 25 days in February 2021.
Black Book index
Black Book's Used Vehicle Retention Index also fell from January to February, the first time it's done so since last summer.
The index fell to 193 points in February, down 4 points from its January level, Black Book said last week. The index number is up 68 percent from February 2021 and up 46 percent from February 2020.
Black Book reported February wholesale prices declined in all segments except full-size and compact vans, according to Alex Yurchenko, chief data science officer at Black Book. That led to a decrease in the overall monthly seasonally adjusted retention index, Yurchenko said in a news release.
So far, a tax season boost to retail demand is weaker than in a typical pre-pandemic year, he said.
"We still expect a slower rate of decrease in prices in May with possible appreciation in some segments as the spring buying market arrives," Yurchenko said.