After ticking up in October, wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) showed a more sizable gain in November, which resulted in a Manheim Used Vehicle Value Index reading of 123.3 — an increase of 0.7% from a year ago.
The five-month decline in pricing lowered wholesale values by less than 3%, and the subsequent two-month rise has brought prices within 1.3% of their April high, says Manheim.
Average auction prices for rental risk units (both adjusted and unadjusted for mileage and mix shifts) moved up in November relative to October, but they were still down year-over-year, says Manheim. November’s auction volume of rental risk units was up significantly from a year ago, but due to the normal large seasonal reduction, November was still the lowest-volume month of the year. According to Manheim, average mileage on rental risk units crossed the 45,000-mile threshold for the first time ever.
In November, new cars and light duty trucks sold at a seasonally adjusted annual rate of 17.1 million. According to Manheim, that pace might have been artificially boosted by the selling day adjustment and higher fleet sales.
Maintaining that pricing strength over the course of the coming year may prove challenging. The expected plateauing in new vehicle sales, the significant weakening of the yen, and the large amount of dry powder that manufacturers have to raise incentives could lead to aggressive pricing next year, says Manheim.
According to CNW, used vehicle retail sales by dealers ticked up by less than 1% in November, after declining in October. Although year-to-date used vehicle sales by dealers are down 1.1%, all indications are that profits are being generated at record levels.