ATLANTA and LAWRENCEVILLE, Ga. -

While the Black Book Used Vehicle Retention Index declined for the first time this year, the Manheim Used Vehicle Value Index dipped for the second month in a row, showing the unprecedented ascension of wholesale prices might have finally climaxed.

Beginning with Black Book, analysts explained that as wholesale prices started to decline in July, their seasonally adjusted retention index reversed the upward trend for the first time this year and decreased to 161.8.

The movement represented a 4.2 point or 2.6% decline from June when the reading stood at an all-time high of 166.0.

However, Black Book pointed out its index currently stands 28.4% above where it was the same time last year during the recovery of the used market and after COVID-19 related closures in the spring of 2020.

“Wholesale prices peaked in June and declined every week in July, with accelerating decline in the second half of the month,” Black Book chief data science officer Alex Yurchenko said in a news release. “Inventory of new vehicles continued to drop almost daily as the chip shortage continues to cause decreases in production levels. Available used inventory stabilized in July as demand leveled off with record high used retail prices.

“We expect wholesale and retail prices for used vehicles to decline in August as COVID cases continue to increase and consumer confidence takes a temporary dip, due to worries about the pandemic,” Yurchenko continued.

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as a percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition.

To obtain a copy of the latest Black Book Wholesale Value Index, go to this website. 

Similar trends spotted by Cox Automotive

Meanwhile, the experts at Cox Automotive indicated wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 2.6% month-over-month in July. This movement brought the Manheim Used Vehicle Value Index to 195.2, down 5.2 points from the June reading of 200.4.

The newest reading is also down from the Manheim Index all-time high of 203.0 set in May. However, the July figure still represented a 23.6% increase in wholesale prices compared to a year ago.

According to commentary that accompanied the latest update, experts indicated Manheim Market Report (MMR) prices saw weekly declines every week in July with price declines accelerating through mid-month but then slowing the rate of decline over the last two weeks.

Over the last five weeks, Cox Automotive indicated the Three-Year-Old Index declined a net 3.6%. Over the month of June, MMR Retention, which is the average difference in price relative to current MMR, averaged 98.4% and ended the month close to 100%.

“This means that valuation models continue to slightly overstate market prices, but the gap is narrowing. The sales conversion rate also improved as the month progressed and ended the month at a level much more typical for the month of July,” Cox Automotive analysts said.

On a year-over-year basis, Cox Automotive also indicated all major market segments saw seasonally adjusted price increases in July.

“Vans, pickups and sport utility vehicles had the largest year-over-year performance, while the remaining car segments lagged the overall market,” analysts said. “On a month-over-month basis, all major market segments saw declines in July, with pickup trucks declining the most and sports cars declining the least.”

Also of note, Cox Automotive said the average price for rental risk units sold at auction in July climbed 6% year-over-year. But rental risk prices softened 2% compared to June.

Analysts went on to mention average mileage for rental risk units in July was at 88,000 miles, spiking 89% compared to a year ago and up 1.4% month-over-month.