MANHEIM CONSULTING -- April marked the fourth consecutive monthly increase in wholesale used vehicle prices on a mix, mileage, and seasonally adjusted basis. The Manheim Used Vehicle Value Index now stands at 106.6. That represents a year-over-year decline of 1.7%, but an increase of 8.8% since the beginning of the year.
This year's rise in wholesale pricing (and the strong conversion rate at auction) was initially driven by the steep falloff in new vehicle sales, which reduced the supply of trade-ins much more than the underlying demand for those units. Now, however, the stability in the used vehicle market appears to be more “despite of”, rather than “because of”, the weakness in the new vehicle market. As such, periodic setbacks in pricing may be experienced even though the supply/demand dynamics remain positive for used vehicle values.
From a previous report:
Some analysts have suggested that the rapid rise in wholesale used vehicle pricing is a precursor to an improvement in new vehicle sales and may even point to a recovery in the overall economy.
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