"The May and June Index results challenge concerns that increasing wholesale supplies from near-peak off-lease volumes and rising rental volumes would lead to rapidly declining used car values," said Jonathan Smoke, chief economist for Cox Automotive.
ATLANTA, July 10, 2017 /PRNewswire/ -- The Manheim Used Vehicle Value Index hit a record high for the second consecutive month as wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) rose 1.1 percent month-over-month in June. The increase brought the Index reading to 129.3, which also represented a 2.5 percent increase from a year ago.
"The volume of transactions is up more dramatically than supply thanks to real demand from dealers and, in turn, consumers," said Jonathan Smoke, chief economist for Cox Automotive. "Broadly speaking, the second quarter was supported by continued low unemployment and strong consumer confidence remaining near a 16-year high."
Indicative of a stable U.S. economy, first quarter GDP growth was revised from the previous estimate of 1.2 percent to 1.4 percent. Experts predict the second quarter will likely come in stronger at a level of growth consistent with what the economy has experienced throughout this current expansion.
Despite the strength in wholesale used vehicle prices, new vehicle sales year-to-date are down 2 percent compared to last year. Franchised dealers have had more than four million new units in stock for the previous five months, and new vehicle sales in June slipped 3 percent from last year. Except for light truck sales, which were up 4 percent year-over-year, much of the decline can be attributed to a downturn in car sales, which were down 13 percent year-over-year.
For used vehicle pricing trends, all major car segments – excluding compact and midsize car classes – were up from a year ago, with especially strong increases in pickups and vans. Second quarter wholesale pricing for all vehicle segments included:
For rental risk pricing, the average price for these units sold at auction in June was down 4 percent from last year, but were up 0.2 percent compared to May. SUVs and CUVs accounted for 32 percent of June rental risk sales vs. 30 percent last June, and the share of compact cars fell from 25 percent to 23 percent. The average miles for rental risk units was 2 percent below June 2016, rounding out at 40,600 miles last month – significantly less than the record-breaking 50,000+ miles experienced in June 2015.
"The May and June Index results challenge concerns that increasing wholesale supplies from near-peak off-lease volumes and rising rental volumes would lead to rapidly declining used car values," said Smoke. "On the contrary, strong retail demand for recent model year used vehicles is encouraging dealers to buy more vehicles at auction and the increased demand is more than offsetting the higher supply."
About Manheim North America
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 7.5 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 33,000 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 60,000 employees. Cox Enterprises' other major operating subsidiaries include Cox Communications and Cox Media Group. For more information about Cox Automotive, visit www.coxautoinc.com.
SOURCE Manheim