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Wholesale Used-Vehicle Prices Decline in October, Manheim Reports

Wholesale used-vehicle prices declined 0.7% in October, according to Manheim. Non-seasonally adjusted prices declined 2%, with the Manheim Used Vehicle Value Index increasing 0.6% from a year ago to 126.0.

by Staff
November 8, 2016
2 min to read


ATLANTA — Wholesale used-vehicle prices declined 0.7% in October, according to Manheim. Non-seasonally adjusted prices declined 2% in October, with the Manheim Used Vehicle Value Index increasing 0.6% from a year ago to 126.0.

On a year-over-year basis, wholesale pricing for cars remains down, while pricing for vehicles in the truck category remains up. However, in recent months, according to Manheim, vehicles in all segments have been trending downward, withprice performance between cars and trucks having narrowed considerably.

The company explained that although the Manheim Index is mix-adjusted, it does not account for overall inflation in new-vehicle pricing or the shift to higher trim levels. Given that information, the company added, it is not inconsistent for the Index to be up even as commercial consignors report “less-than-satisfying” end-of-term lease residuals or lower repossession recovery rates.

“It is better to look at the index relative to its trend or in relation to a host of current and past new-vehicle price measures,” the company stated in its Manheim Index report. “On that scale, wholesale pricing has shown some easing of late, but it is not particularly weak.”

Results, the company stated, have been in line with its expectations from the beginning of the year.

On the new-vehicle front, new-car and light-duty truck sales in October were about 6% lower than the same time last year. However, the new-vehicle seasonally adjusted annual selling rate (SAAR) was at the highest point it’s been all year — 18 million.

Manheim credits this all-time high SAAR to an artificial boost from a two-day selling day adjustment and bigger incentives moving more volume. Even though the company described the month as “good” in terms of new-car sales, it added that it was not good enough to prevent growing inventory overhang. Production cuts should be expected in the coming months, it added.

“Otherwise, there will be a need for even greater incentives and an inevitable downward pressure on used-vehicle residuals,” the company stated in its report.

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