Mileage Remains Above 45K on Rental Resale Vehicles

Wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) fell 0.5% in March. March’s decline pushed the Manheim Used Vehicle Value Index to a reading of 124.5, which was virtually identical to its year-ago reading of 124.4.

Although wholesale prices fell the last two months, the average level for the first quarter was 1.6% higher than the fourth quarter of last year and 1.3% above the year-ago quarter, according to Manheim. Wholesale pricing has remained slightly above trend level due to continued strong profit opportunities on the subsequent retail sale.

Industrywide it is still true that the new vehicle sales environment is supportive to used vehicle residuals. Reasonable new vehicle inventory levels going into April should also help used vehicle values, says Manheim.

Auction prices for rental risk units sold in March jumped up from February, but the seasonal movement was less than last year’s spike. As a result, prices – although still strong – were down 4.2% from a year ago, adjusting for mileage and broad changes in mix, according to Manheim. On a sales-weighted basis, rental risk prices in the first quarter of 2015 were down 2% from the first quarter of 2014.

Although average mileage on rental risk units in March dipped from February’s record high, it remained above 45,000 miles and up 8% from a year ago.

In recent months, as well as over the past year, wholesale pricing for compact cars has been weak. Pickups and vans continued to be the significant outperformers, according to Manheim.