Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased by 0.2% in December. This brought the Manheim Used Vehicle Value Index to 124.9, a decline of 0.6% from a year ago.
Despite significant increases in auction volumes in 2016, wholesale pricing was firm. On an annual average basis, the Manheim Index was even able to eke out a small gain of 0.3%, the third increase in a row.
In addition to macro-economic and industry factors, this stability has been driven by better — and more efficient — remarketing practices that have enabled commercial consignors to anticipate, respond to, and thus minimize impending swings in wholesale pricing, according to Manheim.
In December, a straight average of auction prices for rental risk units sold at auction topped the $17,000 mark for the first time ever, and it was 5% higher than a year ago, says Manheim. However, after adjusting rental risk prices for broad shifts in market class and mileage, pricing was 4.4% below a year ago.
The average mileage on rental risk units sold in December (38,600 miles) was similar to recent months, but it was 13% lower than a year ago, according to Manheim. The overall condition grade of rental units sold also continued to improve.
Although overall wholesale prices have been very stable of late (a movement of only 1.2% over the past four years), the differences between market classes have been pronounced. At the extremes, adjusted wholesale prices for pickups have risen 28% during this period while compact car values fell 14%, according to Manheim. Blame it on the consumer preference shift toward crossovers and away from small sedans.