Wholesale Used-Vehicle Prices See Sizable Decline in April
MUVVI Dropped to 230.8 (4.4% drop YoY)
“While values increased 8.6% through the first quarter from December, the market has reversed course in April, with our monthly figures showing a month-over-month decline for the first time in 2023,” said Chris Frey, senior manager of Economic and Industry Insights for Cox Automotive. “Values in April also continue to be lower year over year. We’ve experienced eight straight months of year-over-year declines, averaging 8.3%, and it’s likely not over yet. During the financial crisis, we had 16 months of annualized declines, averaging 5.8%. Though I’m not predicting doom, we’ve surely started a second, and more rapid, decent off the pandemic peak of January 2022.”
Used-Vehicle Retail Sales Declined Year Over Year in April
Assessing retail vehicle sales based on observed changes in advertised units tracked by vAuto, we initially estimate that used-vehicle retail sales declined by 8% in April from March and saw the year-over-year comparison with 2022 deteriorate. Used retail sales are estimated to be down 8% year over year in April. The average retail listing price for a used vehicle has been trending higher.
Using estimates of used retail days’ supply based on vAuto data, an initial assessment indicates April ended at 42 days’ supply, unchanged from 42 days at the end of March and eight days lower than how April 2022 ended at 50 days. Leveraging Manheim sales and inventory data, wholesale supply is estimated to have finished April at 25 days, up two days from the end of March and down one day from April 2022’s estimate of 26 days.
Measures of Consumer Confidence Mixed in April
The Conference Board Consumer Confidence Index® declined by 2.6% in April, as views of the present situation increased by 1.5% but future expectations declined by 8.0%. Consumer confidence was down 6.7% year over year. Plans to purchase a vehicle in the next six months declined to the lowest level since November 2021. The confidence index did not fall as much during the pandemic as the sentiment index from the University of Michigan, and the two series diverged again in April. The Michigan index increased 2.4% in April but was down 2.6% year over year. Views of current economic conditions and expectations improved in April. Consumers’ views of buying conditions for vehicles improved slightly in April and remained much better than a year ago. The daily index of consumer sentiment from Morning Consult also measured improving sentiment in April, increasing by 4.8%. Consumer attitudes have been sensitive to the price of gasoline for over a year now. Gas prices increased early in April but then declined in the second half of the month. According to AAA, the national average price for unleaded gas increased 3.0% in April to $3.61 per gallon as of April 30, down 14% year over year.
Sources
1. Cox Automotive Inc. Wholesale Used-Vehicle Prices See Sizable Decline in April; coxautoinc.com/market-insights/april-2023/muvvi/
