Price changes for selective market classes for March 2014 versus March 2013. Courtesy of Manheim.
Wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) rose 0.9% in March. The Manheim Used Vehicle Value Index reading was 124.4 for March, an increase of 2.2% for the first quarter of 2014 and a rise of 3.3% on a year-over-year basis, according to Manheim Consulting.
The strength of wholesale pricing in 2014 has been consistent with the fundamentals of the retail market. In March, new vehicle sales sprung back from a weather-induced stall in January and February, says Manheim. Used vehicle retail sales also picked up, even though those sales were less impacted by the harsh weather.
Certified Pre-Owned (CPO) sales — which have hit successive annual highs in each of the past three years — rose 10.9% in the first quarter. That supported late-model used vehicle values, the segment that many analysts were worried about because of rising wholesale supplies, according to Manheim.
In March, new car and light-duty trucks sold at a seasonally adjusted annual rate of 16.4 million — more than a million units higher than the pace achieved in either January or February. A rebound was anticipated, but it was not expected to be that strong, says Manheim.
After being at low levels in January and February, rental risk units flowing back into the wholesale market remained depressed in March. As with everything else in the economy, blame the weather, says Manheim. Rental car companies took delivery of nearly a half million new vehicles in the first quarter, but high demand in the insurance replacement segment meant de-fleeting was delayed.
Massive recalls and a late Easter suggest the flow back into the wholesale market will continued to be pushed back, according to Manheim.
The end result has been high prices and high mileage. In March, average auction prices for rental risk units (both adjusted and unadjusted for mix and mileage) were up year-over-year and sequentially. Average mileage remained above the 40,000 mark for the third consecutive month, says Manheim.
By far, pickups have shown the strongest wholesale pricing – both in recent months and over the past year, says Manheim.
Compact cars and luxury cars are the only two major segments down over the past year — and those declines are modest. With respect to price tiers, the wholesale market is performing well across the board, according to Manheim.
March Used Vehicle Index courtesy of Manheim