Wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) rose in August, the third straight monthly increase. According to Manheim Consulting, the Manheim Used Vehicle Value Index now stands at 122.3, an increase of 1.3% from its year-ago level.
The August increase in wholesale prices was the largest since the jump at the end of last year from the impact of Hurricane Sandy. But according to Manheim, the drivers of today’s strong wholesale pricing are more positive – low inventories and higher transaction prices in the new vehicle market and strong profit opportunities in the retail used vehicle market.
Dealers started the month with low inventories for several key models, and with August’s sales pace exceeding expectations, the days’ supply fell even further, says Manheim. In turn, that led to higher new vehicle transaction prices and strong wholesale used vehicle values.
In August, total used vehicle retail unit volumes rose 5.6%, with dealer sales up 4.7%, according to CNW. This put year-to-date sales up 3% for both the total and dealer sales.
Although mileage-adjusted prices for midsize cars are flat relative to a year ago, their seasonally adjusted prices have improved significantly in recent months, says Manheim. In the first half of this year, wholesale pricing for midsize cars was hurt by the competitive offerings and price discounting in the new vehicle market.
When it comes to average auction prices for rental risk vehicles, there was little change in August relative to July. On a year-over-year basis, prices were up 1.4%. According to Manheim, pricing strength in the new vehicle market helped these late-model used units.
Manheim Used Vehicle Value Index; Source: Manheim Consulting