Manheim Reports Used Car Market Is Strong
Used Vehicle Prices in Q3 Up Nearly Three Percent from a Year Ago
ATLANTA, Oct. 7, 2015 /PRNewswire/ -- With wholesale used vehicle prices increasing in September for the fourth consecutive month, wholesale pricing remains one of strength and stability. This brought the Manheim Used Vehicle Value Index – a measure of wholesale prices adjusted for mix, mileage and season – to a reading of 124.8 in September, representing an increase of 2.8 percent from a year ago.
"Wholesale pricing trends have defied expectations from analysts at the beginning of the year, but used vehicle values are not defying market fundamentals," said Tom Webb, Chief Economist for Cox Automotive. "With pricing up nearly three percent from last September, consumers continue to see the increased value in purchasing used vehicles."
Despite a bad September employment report with earnings remaining flat and a decrease in the labor force participation rate, the economic outlook remains solid and the number of job openings is strong – adding to both lender and consumer confidence. Illustrating this, the weakest pricing tiers remained in the $9,000-$11,000 range while luxury cars and SUVs and CUVs showed modest gains.
Third quarter wholesale pricing for vehicle segments included:
- Compact Car prices were down 5.4 percent in September compared to the same period last year and once again remain the only major market segment with lower pricing versus a year ago.
- Midsize Cars remain one of the weaker segments, but saw an increase of 2.6 percent compared with the same time period last year.
- Luxury Car values had a small gain of 0.5 percent over the same period last year, and remain weak considering this was also the case for last year's pricing. The small gain can also be attributed to more efficient re-marketing of cars in this class.
- Pickups and Vans once again won the top spots, with pickup pricing up a significant 11.8 percent and vans up a more modest 5.1 percent on a year-over-year basis.
- SUVs and CUVs rose 3.1 percent compared with last September, helped by an increase in vehicle miles of travel and lower gas prices.
"Used vehicle operations – including CPO sales – should be set up well for October given that new vehicle inventory levels are down thanks to a higher sales pace last month," said Webb. "Supporting the used vehicle industry's strength, low initial jobless claims in September and a high number of open positions per job seeker is giving workers the confidence to borrow and lenders the confidence to lend."
Visit Manheim's website to access to a variety of company publications, including recent Auto Industry Briefs, white papers and blog entries by Tom Webb.
About Manheim (www.manheim.com)
Manheim is the leading global provider of vehicle remarketing services, connecting buyers and sellers of used vehicles to the largest wholesale used-vehicle marketplace. The company helps dealer and commercial customers achieve results by providing physical and digital auction channels, data analysis, financing, transportation and mobile products and solutions.
Manheim pioneered in-lane vehicle auctions and has been an innovator in both digital and mobile auction platforms. Manheim registers nearly 7 million used vehicles annually, facilitating transactions representing nearly $46 billion in value. Manheim's research and consulting arm, Manheim Consulting, provides industry-leading market intelligence and publishes the widely recognized annual Used Car Market Report. The company offers dealer financing through NextGear Capital, Inc. and transportation services through Ready Auto Transport.
Headquartered in Atlanta, Manheim has more than 20,000 employees in 122 worldwide sites and generates annual revenues of more than $2.5 billion. A subsidiary of Cox Enterprises, Manheim participates in "Go Green with Manheim," the company's sustainability program.
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