Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.6% month over month in December, bringing the Manheim Used Vehicle Value Index to 236.2, a 46.6% increase from a year ago, according to numbers release by Manheim on Jan 7.

The non-adjusted price change in December was a decline of 1.1% compared to November, leaving the unadjusted average price up 43.4% year over year.

Manheim Market Report (MMR) values saw weekly price decreases in December that accelerated in the final weeks of the month. Over the full four weeks in the month, the Three-Year-Old Index declined a net 1.7%. Over the month of December, daily MMR Retention, which is the average difference in price relative to current MMR, averaged 98.3%, which meant that market prices were behind MMR values.

The average daily sales conversion rate also declined in the month to 53%, which was close to normal for the time of year. For example, the sales conversion rate averaged 52% in December 2019. This indicates that the month saw balance between buyers and sellers, and as a result, most vehicles showed price depreciation.

On a year-over-year basis, all major market segments saw seasonally adjusted price increases in December. Vans had the largest year-over-year performance, while the pickup, luxury car, and SUV segments lagged the overall market. On a month-over-month basis, no segment saw declines, as compact and luxury vehicles outpaced the market and remaining segments.

Vehicle sales continue downward trend: According to Cox Automotive estimates, total used-vehicle sales were down 4% year over year in December. Cox estimates the December used SAAR to be 39.1 million, down from 40.6 million last December and flat compared to November’s revised 39.1 million SAAR. The December used retail SAAR estimate is 20.4 million, down from 21.6 million last year and flat month over month.

Using a rolling seven-day estimate of used retail days’ supply based on vAuto data, Cox sees that used retail supply peaked at 114 days on April 8, 2020. Normal used retail supply is about 44 days’ supply. It ended December at 54 days, above normal levels. Cox estimates wholesale supply peaked at 149 days on April 9, 2020, when normal supply is 23. It ended December at 33 days.

December total new-vehicle sales were down 24% year over year, with one more selling day compared to December 2020. Month over month, December new-vehicle sales were down 4%. The December SAAR came in at 12.4 million, a decrease from last year’s 16.3 million and December 2019’s 16.9 million rate.

Combined sales into large rental, commercial, and government buyers were down 32% year over year in December and down 4% full-year 2021 versus 2020. Sales into rental decreased 59% year over year in December and finished the year down 9% compared to full-year 2020. Commercial sales are down 6% year over year versus 2020 in December and up 8% for full-year 2021. Including an estimate for fleet deliveries into the dealer and manufacturer channel, Cox estimates that the remaining retail sales were down 23% year over year in December, leading to an estimated retail SAAR of 11 million, which was down from 13.9 million last December and down from December 2019’s 13.6 million rate.

Rental risk mileage decreases: The average price for rental risk units sold at auction in December was up 38% year over year. Rental risk prices were up 3% compared to November. Average mileage for rental risk units in December (at 69,000 miles) was up 32% compared to a year ago and down 9% month over month.

December saw mixed trends with consumer sentiment: Consumer Confidence according to the Conference Board increased 3.5% in December, and the November reading was revised up. However, in the underlying components, the view of the present situation declined slightly while the view of the future jumped 7.4%. Plans to purchase a vehicle in the next six months increased to their highest level since July. Plans to purchase a home also increased to their highest level since February. The sentiment index from the University of Michigan reported a 4.7% increase in December, with both underlying measures of current conditions and expectations improving. By contrast, the Morning Consult daily index saw a decline of 2.3% in December, with all the decline coming after Christmas.