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holesale used vehicle prices (on a mix-, mileage-, and seasonally adjust-
Wed basis) decreased 0.4% month-over-month in August. This brought the
Manheim Used Vehicle Value Index to 194.5, a 18.8% increase from a year ago. The
seasonal adjustment caused the monthly decline as the non-seasonally adjusted
average price increased 1.4% in August, which left unadjusted prices up 19.9%
year-over-year. In recent years, August has seen large vehicle value increases,
which is why the seasonal adjustment is producing the lower value when the
market is seeing real prices rise.

Manheim Market Report (MMR) values saw changing August total new vehicle sales were down 17% year-
trends in August that resulted in stable prices and then over-year, with one less selling day compared to August
accelerating weekly increases. Over the last four weeks, 2020. Month-over-month, August new vehicle sales
the Three-Year-Old Index increased a net 2.1%. Over the were down 15%. The August SAAR came in at 13.1 mil-
month of August, MMR Retention, which is the average lion, a decrease from last year’s 15.2 million and August
difference in price relative to current MMR, averaged 2019’s 17.1 million rate.
100%; but the first weekday of the month saw 98.8%
retention, while the final weekday saw 100.9% retention, Combined sales into large rental, commercial, and gov-
which means that market prices are now ahead of MMR ernment buyers were up 11% year-over-year in August.
values when they started the month below. The sales Sales into rental increased 118% year-over-year in Au-
conversion rate also increased over the course of the gust and are up 7% compared to the same time period
month and ended the month at a level higher than what last year. Commercial sales are down 4% year-over-
is typical for August. This indicates that buyers have year in August and are up 17% year-to-date 2021 versus
become more aggressive than the behavior we saw in 2020. Including an estimate for fleet deliveries into the
June and July. dealer and manufacturer channel, we estimate that the
remaining retail sales were down 19% year-over-year in
On a year-over-year basis, all major market segments August, leading to an estimated retail SAAR of 11.5 mil-
saw seasonally adjusted price increases in August. Vans lion, which was down from 13.0 million last August and
and sport utility vehicles had the largest year-over-year down from August 2019’s 13.8 million rate.
performance, while the remaining car and pickup seg-
ments lagged the overall market. On a month-over- RENTAL RISK PRICING RISES
month basis, the compact car and pickup segments The average price for rental risk units sold at auction
saw declines, while remaining segments saw modest in August was up 18% year-over-year. Rental risk pric-
growth. es were up 13% compared to July. Average mileage for
rental risk units in August (at 70,00 miles) was up 78%
VEHICLE SALES FALL compared to a year ago but down 20% month-over-
According to Cox Automotive estimates, total used ve- month.
hicle sales were down 12% year-over-year in August.
We estimate the August used SAAR to be 36.7 million, AUGUST BRINGS CLEAR DECLINES
down from 41.6 million last August and flat compared to IN CONSUMER SENTIMENT
July’s 36.7 million SAAR. The August used retail SAAR Consumer Confidence according to the Conference
estimate is 20.1 million, down from 22 million last year Board declined 9.0% in August and left confidence
and flat month-over-month. down 14.2% compared to February 2020. Plans to pur-
chase a vehicle in the next six months declined to the
Using a rolling seven-day estimate of used retail days’ lowest level in three months but remained higher than
supply based on vAuto data, we see that used retail a year ago. Plans to purchase a home also declined to
supply peaked at 114 days on April 8, 2020. Normal used the lowest level in three months and were unchanged
retail supply is about 44 days’ supply. It ended August at year-over-year. Measures of consumer sentiment from
40 days, which is below normal levels. We estimate that the University of Michigan and the index of consumer
wholesale supply peaked at 149 days on April 9, 2020, sentiment from Morning Consult also showed declines
when normal supply is 23. It ended August at 19 days. in August. The Morning Consult index declined 5.5%
in July and ended August down another 3.1%. That left
sentiment down 19.5% from Feb. 29, 2020.
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