📉 MUVVI Alert: Steepest Monthly Drop in a Year

📊 Strategic Driver

Used Vehicle Values Hit Speed Bump Amid Segment Divergence

The Manheim Used Vehicle Value Index (MUVVI) continues its volatile trajectory, with May 2025 data showing a 1.4% month-over-month decline to 205.2 — the steepest monthly drop in nearly a year. Yet the year-over-year picture tells a different story, with values still up 4% compared to May 2024, though this represents a deceleration from April's 4.9% annual growth rate. This divergence between monthly weakness and annual strength suggests the used vehicle market is entering a normalization phase after years of pandemic-induced volatility.

The segment-specific data from May reveals telling disparities: luxury vehicles posted the strongest year-over-year gains at +5.9%, followed by SUVs at +5.5% and pickups at +2.5%. Meanwhile, compact cars actually declined 1.5% year-over-year, with mid-size cars managing only modest 0.8% growth. This bifurcation reflects broader consumer preferences and supply chain dynamics that will directly impact claim severity calculations across different vehicle classes.

🧮Financial Sensitivity Preview

Directional Impact: Mixed to Slightly Negative

The 1.4% monthly decline in May suggests near-term relief for auto physical damage claim costs, particularly beneficial for insurers with higher exposure to compact and mid-size vehicles. However, the persistent 4% year-over-year increase maintains upward pressure on total loss settlements and repair cost benchmarks. Luxury and SUV-heavy portfolios face continued headwinds, while compact car exposure may provide some reserve release opportunities.

🧠Executive Briefing Notes

• MUVVI Release Schedule: Cox Automotive's 2025 calendar shows June data was released Friday, June 6th, with the next quarterly earnings call scheduled for July 8th — mark your calendars for deeper market insights. Source: Cox Automotive

• Segment Divergence Accelerating: Luxury vehicles (+5.9% YoY) and SUVs (+5.5% YoY) continue outpacing compact cars (-1.5% YoY), suggesting claim severity will increasingly depend on portfolio mix rather than broad market trends. Source: Laser Appraiser

• Monthly Volatility Persists: The 1.4% May decline represents the largest monthly drop since mid-2024, following April's 2.7% surge — expect continued month-to-month swings to complicate quarterly reserve adequacy assessments. Source: Trading Economics

• Annual Growth Momentum Slowing: Year-over-year growth decelerated from 4.9% in April to 4% in May, suggesting the post-pandemic used vehicle inflation cycle may finally be moderating. Source: Trading Economics

• 2025 Sales Forecast: Industry analysts project retail used-vehicle sales will reach 20.1 million units in 2025, up just 1.2% from 2024 — modest volume growth should help stabilize pricing dynamics. Source: CBT News

🧵One-Line Takeaway

Used vehicle values posted their steepest monthly decline in a year during May, but luxury and SUV segments continue driving annual inflation — time to stress-test your auto physical damage reserves by vehicle class.

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