Lower Mileage Leads to Increase in Rental Risk Prices

Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased for the fourth consecutive month in July. The Manheim Used Vehicle Value reading was 127.0 for July, an increase of 2.3% from a year ago.

With respect to new vehicle pricing (when looked at using both the new vehicle CPI and average transaction prices), wholesale pricing is not exceptionally high, according to Manheim. And, as is oft noted, narrowing margins mean that all of the increase in wholesale pricing is not being totally borne by the retail used vehicle buyer.

As the case in June, a straight average of auction prices for rental risk units sold in July jumped substantially (+21%) from a year ago because of significantly lower average mileage (-21%) and a richer mix of units sold, according to Manheim.

After adjusting for mileage and broad shifts in the mix of market classes, rental risk prices were up less than 1% on both a month-over-month and year-over-year basis.

Although compact cars remained the weakest of all the major segments over the past year, their pricing over the past three months outperformed the overall market, says Manheim. Modest price improvements and better inventory levels on the new vehicle side helped. Sports cars, pickups, and mid- and full-size SUVs are the only segments with significant increases in wholesale pricing over the past year.