Wholesale used-vehicle prices, which have been on a wild ride for the better part of the last two years, appear to be cooling off, Cox Automotive analysts say. And overall used-vehicle sales volume is expected to dip in 2019.

Wholesale prices on the Manheim Used Vehicle Value Index fell 1.04 percent from August to September. And compared to September 2018, values were flat. This latest report from Cox Automotive’s auction unit marks a return to more usual seasonal patterns for used-car market watchers.

“Used prices had seen month-over-month gains as we moved past the spring selling season heading into summer this year, but that is no longer the case heading into fall,” Zo Rahim, Cox Automotive manager of economics and industry insights, said in a quarterly conference call this month.

2018 was especially abnormal for wholesale used-vehicle values, which showed a typical seasonal spring bounce last year but then stayed hot through summer and well into fall. That’s a period in which prices usually cool off.

2019, too, showed similar signs of a long-lasting spring bounce. It followed an atypical decline in values to start the year for the bellwether 3-year-old-vehicle category, the most popular vintage at Manheim auctions. Those vehicles showed eight straight weeks of price declines in January and February, typically a stable time. Sinking consumer confidence, extreme cold in parts of the U.S. and a government shutdown sapped sales, Cox Automotive Chief Economist Jonathan Smoke said.

“Plus, prices had risen so much last summer and fall that there was room for decline in early 2019,” Smoke said.

This year’s spring bounce — typically tied to tax returns — started in March. Values made slight, uncharacteristic gains in June. While 2018’s gains continued into July and August, that was not the case in 2019. Values declined just slightly for those months. September marked an abrupt change in the pattern, with declines accelerating each week — similar to what happened to values last year, albeit a month later in October.

“It was an interesting year so far,” Rahim told Automotive News, adding that it was not as abnormal as 2018. “I think we’re kind of starting to get back to normal.”

Three-year-old-vehicle values in aggregate dropped 2.6 percent in September vs. the more typical decline of about 1.5 percent. Cox estimates that total used-vehicle sales volume dipped just 0.1 percent in September, the most recent month for which figures are available.

The seasonally adjusted, annualized rate of used-vehicle sales was an estimated 39.8 million, up from 39.7 million last September. Overall, the Manheim index ended September flat from a year ago.

Cox projects total used-vehicle sales of 39.2 million this year vs. 39.4 million in 2018. While overall volume is expected to drop, Smoke said he expects sales of used vehicles at dealerships to remain strong as supply shifts to higher-quality, younger and more expensive vehicles.

Said Smoke: “While the used market in total is no longer growing, we believe the retail market will still be growing for several more years.”

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