Cox Automotive Report

JUNE'S FULL-MONTH MANHEIM USED-VEHICLE DATA SHOW SIGNS OF MARKET NORMALCY AFTER AN UNPRECEDENTED RUN IN 2020 AND 2021

Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.3% in June from May. This brought the full-month Manheim Used Vehicle Value Index for June to 219.9, up 9.7% from a year ago. The non-adjusted price change in June decreased 1.8% compared to May. The drop in June left the unadjusted average price up 10.7% year over year, significantly below the increase recorded in March when year-over-year growth stood at 23.3%.

According to a mid-month update published this morning, wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 0.7% in the first 15 days of July compared to the full month of June. Seasonal adjustment pushed the Manheim Used Vehicle Value Index up to 221.5, a 13.4% increase from July 2021. The average non-seasonally adjusted price was down 2.2% in the first half of July compared to the full month of June, leaving the unadjusted average price up 11.4% year over year. The latest trends in the key indicators suggest wholesale used-vehicle values should see declines in the month’s second half.

Read the full-month press release for the latest official Manheim Used Vehicle Value Index Data. Watch a replay of the quarterly call and download the presentation for more details on the latest official Manheim Used Vehicle Value Index reading and the major economic and industry trends that shaped the quarter. See the mid-month Data Point published today for a check-in covering the first 15 days of July.

RETAIL MARKET SEES STABILITY WHILE CONSUMER SENTIMENT REMAINS WORRISOME

Consumer sentiment was pulled down slightly over the weekend, possibly due to the recent rise in omicron variant cases. While consumer sentiment remains worrisome, Chief Economist Jonathan Smoke notes in the Auto Market Report video published today that he is seeing stability in the retail market.
 
Smoke explains: “We continue to see that the new market is challenged by supply and record-high prices and low incentives where the used market is seeing normal levels of supply and prices that are coming down. As a result, that creates opportunities for purchases and sales. We could actually see sales this year in the used market outpace last year in the coming weeks this summer and fall.”

Read the Auto Market Weekly Summary and watch the Auto Market Report video for more data and insights from Smoke on new and used retail sales and inventory and Cox Automotive leading indicators.

USED-VEHICLE MARKET LOOKING MORE NORMAL IN INVENTORY AS PRICES INCH DOWN

In contrast to the new-vehicle market, the used-vehicle market is looking more normal with reasonably strong sales, decent inventory and prices that are high but have begun to inch down, according to a Cox Automotive analysis of vAuto Available Inventory data.

In the new-vehicle market, average listing prices rose throughout June but began to retreat by the end of the month, while inventory held relatively steady.
 
Read the Data points for new vehicles and used vehicles to find out more about the end-of-June inventory levels, days’ supply and average listing prices.

NEW-VEHICLE PRICES SET A RECORD IN JUNE, ACCORDING TO KELLEY BLUE BOOK, AS LUXURY SHARE HITS NEW HIGH

The average price paid for a new vehicle in the U.S. in June was the highest on record and marked the first time the average transaction price (ATP) surpassed the $48,000 mark, according to data released last week by Kelley Blue Book, a Cox Automotive company.

The new-vehicle ATP increased to $48,043 in June 2022, according to Kelley Blue Book, beating the previous high of $47,202 set in December 2021. June prices rose 1.9% ($895) from May and were up 12.7% ($5,410) from June 2021.

See the Data Point to learn more details, including which non-luxury segments are transacting nearly 30% below the industry average. 

NEW-VEHICLE AFFORDABILITY DECLINES AGAIN IN JUNE, TYPICAL MONTHLY PAYMENT HITS RECORD $730

New-vehicle affordability worsened again in June with increases in interest rates and vehicle prices outpacing income growth, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The number of median weeks of income needed to purchase the average new vehicle increased for the fourth consecutive month reaching 42.2 weeks in May. The estimated typical monthly payment increased to $730, which was a new record high.

“While tracking new-vehicle prices and median household income is informative to provide a broad look at relative new-vehicle affordability over time, it is important to remember that our metrics are built on national averages,” notes Jonathan Smoke, chief economist at Cox Automotive. “The truth is, new vehicles are mostly purchased by households with well-above-average income, and many of these high-earning buyers are able to secure below-average interest rates. With this group, vehicle availability and low inventory is a bigger hurdle than vehicle prices.”

Read about the Cox Automotive/Moody’s Analytics Vehicle Affordability Index and find out what factors were influencing new-vehicle affordability in June.

10 TAKEAWAYS FROM U.S. AUTO SALES DATA: Q2 2022
 
New-vehicle sales in Q2 were off by more than 20%, as tight inventory continues to hold back the market. High prices are certainly impacting some buyers, but the Industry Insights team at Cox Automotive continues to believe new-vehicle demand is relatively healthy and, with sufficient supply, sales volumes could be higher.  
 
Check out the 10 quick takeaways for Q2 and through the first half of 2022 from our Kelley Blue Book team, and download the Q2 Kelley Blue Book Light-Vehicle Sales Report.

EV SALES HIT A NEW RECORD IN Q2 2022

This much we know: New-vehicle sales in the second quarter struggled, up only modestly from the first quarter and down more than 20% from Q2 2021. The reasons are well documented – tight inventory, high prices, consumer sentiment dropping. There were a few positive notes in the Q2 sales numbers, and among them, EV sales stood out the most. Sales of battery-powered electric vehicles – pure EVs – jumped to 196,788, a record high and a 13% increase from Q1.
 
Check out the 10 quick takeaways from the Q2 Kelley Blue Book Electrified Vehicle Sales Report.