Though still well above pre-pandemic levels, wholesale vehicle prices closed 2023 with a larger than expected (or typical) decline, capping a two-year run of downhill movement.

That’s according to separate analyses released Monday by Cox Automotive and Black Book.

Cox Automotive’s Manheim Used Vehicle Value Index fell 7.0% year-over-year in December and dropped 0.5% month-over-month, coming in at 204.0.

Wholesale prices were up close to 33% from December 2019, Cox said, but have slowed 21% since the December 2021 peak.

“We ended 2023 with about half of the used-vehicle value decline we saw in 2022, but still more than we’d see in a typical year,” Cox Automotive chief economist Jonathan Smoke said in a news release.

Black Book’s Used Vehicle Retention Index closed the year by dropping 10.9% year-over-year in December and falling 1.7% from November, coming in at 151.0.

Still, the index is up 32% from last pre-pandemic reading in March 2020.

“Wholesale prices continued to decline in December at a higher than usual (pre-2020) rate, but the depreciation was slower than in November,” Black Book chief data science officer Alex Yurchenko said in a release. “We saw a drop in the conversion rates at the auctions, which is typical this time of the year.

Looking forward, Black Book said January should see auction activity increase with dealers acquiring inventory for the spring market.

“As OEMs push more incentives to move new inventory, used wholesale prices are expected to decline in January although not as rapidly as in the last quarter of 2023,” Yurchenko said.

Looking forward, Cox is projecting its Manheim index will have increased 0.5% year-over-year in December of this year. It anticipates “muted fluctuations” in used-vehicle values and less volatility, given the recovery in wholesale volumes  in the last year. Both wholesale and retail markets have moved “more toward equilibrium,” the company said.

“For 2024, the key word for the wholesale market is ‘normalcy.’ Manheim expects constrained growth with a volume increase of less than 1%,” Smoke said. “As for price patterns, we anticipate a normalization trend, and we expect that 2024 will be the first year in five where we will experience fairly normal depreciation in the wholesale market.”

Added Cox Automotive senior director of economic and industry insights Jeremy Robb: “As we move into 2024, it’s important to note that used-vehicle values increased faster than the overall rate of inflation.

“So, even though prices have come down over the last two years, they are still about 33% higher than at the end of 2019,” Robb said. “More normal declines will likely be seen in the coming years, but the average value of a wholesale unit will continue to be higher than in the past.”