Used-Vehicle Market Remains Solid, Manheim Reports
Used-vehicle values remained in line with expectations during the second quarter, according to Manheim.
ATLANTA — With wholesale used-vehicle prices inching up in June after a consecutive four month decline, the Manheim Used Vehicle Value Index registered at a 123.9 during the month, representing a virtually unchanged 0.1% decline from a year ago. The Manheim Used Vehicle Value Index is a measure of wholesale prices adjusted for mix, mileage and season.
“With no surprises and pricing that is in line with analyst expectations, it’s been business as usual for the used-vehicle market in the second quarter,” said Tom Webb, chief economist for Cox Automotive. “With pricing nearly identical to last year at this time, consumers continue to see the value in purchasing used vehicles, which remain a profitable part of a dealer’s business.”
With stable job growth and attractive financing continuing for the retail market for new and used vehicles, the strongest pricing tiers were everything above $15,000. Continuing the trend of weakness, vehicles in the $9,000-$11,000 range also showed a significant increase in volume of vehicles offered.
During June, wholesale pricing for compact cars was down 7.2% June relative to a year ago, and the segment once again continued to be the weakest. Midsize cars remained one of the weaker segments and was also down relative to last year, but saw a much more modest decrease of 0.8%.
Luxury car values fell 0.4% over the past year. Despite a good June, this class continued to underperform the overall market, and within that segment, entry luxury cars remain under the greatest price pressure.
Pickups and vans once again won the top spot for the strongest vehicle segment with pickups up 6.7% and vans up 2.7% on a year-over-year basis. Within the van segment, full-size commercial passenger units and cargo vans were especially strong thanks in part to limited inventory. SUV and CUV remained virtually identical to the same period a year ago, with a slight decrease of 0.3%.
It is expected the new car dealership groups will show strong vehicle operations when they report their second quarter results. Illustrating the industry’s strength, CPO sales continued their record pace, with sales up 17.6% in June and 12.5% for the first half of 2015.
“The pricing strength is a testament to solid retail markets, good remarketing practices and greater operating efficiencies,” Webb said. “While current wholesale pricing is now in line with historic normalcies and market fundamentals, a further acceleration of wholesale inventory combined with seasonal headwinds will likely mean we’ll see price declines.”
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