Wholesale Price Decline Continues in March

Price changes for selective market classes for March 2016 versus March 2015. Courtesy of Manheim.
Price changes for selective market classes for March 2016 versus March 2015. Courtesy of Manheim.

Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined in March for the third consecutive month. That brought the Manheim Used Vehicle Value Index to a reading of 122.5 for March, a decline of 1.6% from a year ago.

Although wholesale prices have fallen every month in 2016, this should not be looked at with alarm. After all, it has long been anticipated that pricing would ease this year, according to Manheim. Additionally, evolving industry patterns and practices may be muting what used to be a strong spring bounce in pricing.

Nevertheless, fundamentals do suggest that the current trend will prove longer lasting than the several short cycles that we have already experienced since the May 2011 peak in the Manheim Index.

As expected, auction sales of rental risk units rose in March as higher new unit sales into rental (and a low conversion rate on February auction sales) forced the situation, according to Manheim. The average auction price (adjusted for broad shifts in mix and mileage) rose 1% from February, but it was down 7.3% from a year ago. Average mileage was the lowest since September 2014.

Wholesale prices for compact cars just can’t seem to find a bottom, despite the multiyear adjustment. Blame competitive pricing on the new vehicle side and the consumer preference shift to small crossovers, which are now more available in the wholesale marketplace, according to Manheim. Wholesale pricing for luxury cars was also weak in March, after stabilizing at year-end.

Vehicles in the $7,000 to $10,000 price range continued to face the greatest competitive pricing pressure in the first quarter, says Manheim. Vehicles valued above $15,000 did noticeably better. The percentage growth in auction volume was slanted toward units above $25,000.

March Used Vehicle Index, courtesy of Manheim
March Used Vehicle Index, courtesy of Manheim

Comment On This Story

Name:  
Email:  
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

Why Do We Visit Capitol Hill?

Members of the American Car Rental Association met with U.S. senators, representatives, and their aides last week. Here’s why bringing the message to this forum matters.

The Customer Isn’t Always Right

Not caving to a customer with a blatant agenda may have consequences, especially for a small rental company that relies on stellar Yelp ratings to advertise. But business integrity must prevail.

The Truth Behind Compact Van Depreciation

Why are large van values holding up better than their compact counterparts, and will it last?

Job Finder: Access Top Talent. Fill Key Positions.