Manheim Reports Used Vehicle Prices Up for Third Consecutive Month
Q2 Used Vehicle Values Exceed Expectations, Signal Overall Stability
ATLANTA, July 8, 2016 /PRNewswire/ -- Wholesale used vehicle prices increased for the third consecutive month in June, resulting in wholesale prices at their highest level in four years. This brought the Manheim Used Vehicle Value Index – a measure of wholesale prices adjusted for mix, mileage and season – to a reading of 126.2. This represents a difference of just 1.3 percent from the record high reached in May 2011.
"Despite the second quarter's uptick in pricing, there's no doubt that the overall long-term trend for wholesale pricing is still down," said Tom Webb, chief economist for Cox Automotive. "With this in mind, the recent rise in pricing should be taken advantage of now, as well as appreciated, given that the gains will likely raise the floor to which prices will fall in this cycle."
Pointing to overall long-term stability in the market, total used retail unit volumes increased 4 percent in the first five months of 2016. According to the National Automobile Dealers Association (NADA), franchised dealer sales were up 3 percent and independent sales up 6 percent.
"These gains exceed what the fundamentals of employment gains, credit availability and ownership needs would suggest and more likely reflect the forced churn caused by higher wholesale supplies," said Webb. "With this environment remaining in the second half of the year, experts predict continued pressure on pricing and gross margins."
Within the pricing tiers, there was weakness in the lower-middle tier in the $7,000 to $8,000 range. On the opposite side of the spectrum, strength in wholesale pricing remains concentrated in pickups, vans and certain sports cars. These are also the same segments enjoying the strongest increases in average new vehicle transaction price. For all other classes, wholesale pricing is flat to down.
Second quarter wholesale pricing for vehicle segments included:
- Compact Car prices represented the biggest pricing decrease of all car classes, which was down 2.4 percent in June over the same period last year due to continuing competitive pricing of new vehicles.
- Midsize Cars remained one of the weaker segments with an extremely modest increase of 0.2 percent compared with the same time period last year.
- SUVs and CUVs increased 1.3 percent compared with last June thanks to overall lower gas prices, a favorable lending environment and consumer preference shifting towards crossover vehicles.
- Pickups and Vans represented the most significant increase of all car classes, with pickups climbing 8.1 percent and vans rising a more modest, yet still strong, 3.5 percent.
- Luxury Car wholesale pricing increased a modest 1.0 percent compared with last June, which can be partially attributed to solid off-lease remarketing programs.
For rental risk units, auction prices for those sold in June jumped nearly 18 percent from a year ago. However, after adjusting for broad changes in mix and mileage, rental risk auction prices were flat in June relative to a year ago because the average mileage on these units last year was a record breaking 51,200 miles. This year, however, the average has fallen to 38,500, which is the lowest since December 2013. June's mix of crossovers and vans was significantly higher, while the share of rental risk unit sales accounted for by midsize cars was down.
Visit Manheim's website to access a variety of company publications, including white papers, case studies and blog entries by Tom Webb.
Manheim® is North America's leading provider of vehicle remarketing services, connecting buyers and sellers to the largest wholesale used vehicle marketplace and most extensive auction network. Through its 115 physical, digital and mobile auction sales, the company helps dealer and commercial clients achieve business results by providing innovative end-to-end inventory solutions. Approximately 18,000 employees enable Manheim to register about seven million used vehicles per year, facilitate transactions representing nearly $50 billion in value and generate annual revenues of more than $2.6 billion. Headquartered in Atlanta, Manheim North America is a Cox Automotive™ brand. For more information, visit http://press.manheim.com.
About Cox Automotive
Cox Automotive, Inc. is transforming the way the world buys, sells and owns cars with industry-leading digital marketing, software, financial, wholesale and e-commerce solutions for consumers, dealers, manufacturers and the overall automotive ecosystem worldwide. Committed to open choice and dedicated to strong partnerships, the Cox Automotive family includes Autotrader®, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, vAuto®, Xtime® and a host of other brands. The global company has nearly 30,000 team members in more than 200 locations and is partner to more than 40,000 auto dealers, as well as most major automobile manufacturers, while engaging U.S. consumer car buyers with the most recognized media brands in the industry. Cox Automotive is a subsidiary of Cox Enterprises, Inc., an Atlanta-based company with revenues of $18 billion and approximately 55,000 employees. Cox Enterprises' other major operating subsidiaries include Cox Communications and Cox Media Group. For more information about Cox Automotive, visit www.coxautoinc.com.
For further information: Yancey Casey, Manager, Public Relations, 678.645.8574, email@example.com
SHARE THIS NEWS
Read more like this
This investment builds on Cox’s goal to grow new diverse lines of business.
Cox Enterprises Announces STEAM-Powered Classroom Challenge with DonorsChoose to Provide Teachers with Essential Classroom Materials
Cox will match up to $100,000 in community donations toward STEAM and sustainability-related ...
Maury Wolfe, vice president of corporate responsibility and social impact at Cox Enterprises, has been...