Rent Alert: Wholesale Price Roll

The used vehicle market continues its positive upward overall price trend started in the spring, as interpreted by Adesa, Manheim, Black Book and Kelley Blue Book.

Adesa Analytical Services reported that not only were average wholesale prices up on a month-over-month basis in May, they were up on a year-over-year basis for the first time since December 2007, the start of the recession.

The Manheim Used Vehicle Value Index stood at 109.1 for May, resulting in the first year-over-year gain in pricing since Oct. 2007. May marked the fifth consecutive monthly increase in wholesale used vehicle prices on a mix, mileage and seasonally adjusted basis.

Volume, Volume, Volume
These increases can be attributed to a lack of supply coupled with a healthy demand for used vehicles.

“With used vehicles remaining a relative bargain for consumers who could afford to buy a new vehicle, and both incoming and inventoried wholesale vehicle supply tapering, the wholesale price recovery looks to continue in the months ahead,” said Tom Kontos of Adesa in his monthly commentary.

Adesa estimated that auction industry inventory levels stood at approximately 37 days at the end of May—much lower than the 73 days around 2008 year-end and at parity with last May. The working down of inventories will continue to put upward pressure on prices in light of still-strong used vehicle demand.

Dismal new vehicle sales are pushing dealer consignment volumes lower, reported Manheim. In May, the seasonally adjusted annual selling rate for new vehicles remained below the 10 million mark for the fifth consecutive month.

In its index report, Manheim echoed Adesa’s supply/demand assessment: “Given that retail used vehicle sales have been flat (and actual demand higher), the resulting loss of trade-ins from new vehicles sales (the majority of which re-enter the wholesale market) has caused dealers to aggressively bid for late-model used vehicles.”

In addition, off-rental volumes into the wholesale market were off more than 30 percent in the first five months of 2009, Manheim stated. This has helped pricing for both program and risk vehicle sales.

Ricky Beggs, managing editor of Black Book, noted that the mileage of rental units in the market has climbed significantly. This mileage level is becoming a little more acceptable, Beggs stated. “There is a market, at the right price, for 2008 models with 46,000 to 53,000 miles,” he said.

CONTINUED:  Rent Alert: Wholesale Price Roll
« Previous  |  1  2  |  Next »

Comment On This Story

Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.


Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Trump and Regulations: An Alt-Fuel View

With 2025 emissions targets back in review, manufacturers, alt-fuel, and alt-power suppliers weigh in on the potential impacts of Trump’s initiatives.

Why GM’s Telematics Announcement is a Really Big Deal

Enabling a telematics connection at the factory — and not through an aftermarket hardware installation — is a game changer for fleets.

Four Thoughts From the 2016 Conference Calls

Sifting through the notes of Avis Budget Group’s and Hertz Global Holdings’ recent fourth quarter conference calls give us some trend lines to watch out for in 2017. (Of course, this gives us an incomplete snapshot, as Enterprise Holdings is privately held.)

Job Finder: Access Top Talent. Fill Key Positions.