The Manheim Used-Vehicle Value Index fell 1.04% month over month in September to 139.9, mostly due to lower-than-average depreciation during the summer, said Jonathan Smoke, chief economist at Cox Automotive. Compared to the same prior-year period, the index was flat.
“September officially ended an incredible run on used-vehicle values, like the way the abnormal heat wave in the South suddenly broke this weekend, the incredibly strong used-car market seems to be slowing down,” Smoke said. “We had the worst year-over-year monthly performance on the Manheim Index in 31 months,” he added, noting that the seasonally adjusted decline this month was the most negative September decline the Manheim Index has seen in 18 years. In addition, 3-year-old vehicles were down on aggregate 2.5% for September. By comparison, average vehicle-price decline is 1.5%, according to Manheim’s report.
Looking forward, Smoke expects September’s depreciation trend to slow through year end, although “the exact outcome is difficult to predict given uncertainty about the broader economy,” he said, noting that he often sounds like “a broken Katy Perry record” when it comes to voicing macroeconomic concerns on the used-car market, such as tariffs and trade disputes.
“There is no question that we had a significant depreciation trend this September that was higher than normal,” Smoke said. “Normally, we see predictable depreciation through the end of the year as demand softens seasonally and gradually. If September’s higher depreciation rate normalizes, used-vehicle values should stabilize, and we could return to a positive year-over-year gain by the end of the year.”
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