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Under the Number / 03 Wholesale

Three months down on the three-year-old book.

Down 1.3% in May, 1.9% in June, 2.8% in July. The declines are accelerating, and that is the core of most used inventory.

Source: Manheim

MMR on the three-year-old index has fallen three months running. Down 1.3% in May, 1.9% in June, 2.8% in July.

Note the shape. Not three flat declines. Each one bigger than the last.

Why this index and not the headline

The three-year-old book is the middle of most used departments. Off-lease age, still under or near a factory warranty, the price band where the volume lives. When people quote the overall index they are averaging that together with everything from late-model to fifteen-year-old iron, and the average hides what is happening to the cars you actually stock.

A store whose used mix sits in that band has been watching its own inventory reprice against it for a quarter, whether or not the headline number said so.

The headline index is an average. Your lot is not.

The part that follows

Accelerating declines in the three-year-old book and a heavy off-lease ramp through the back half of the year are the same story arriving twice. More supply landing into softening values is how a dealer ends up long on exactly the units that are falling fastest.

More from part 03, Wholesale

All of Under the Number

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