Make it two consecutive months where the Manheim Used Vehicle Value Index established a new record.
Analysts determined wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 1.1 percent month-over-month in June. This movement brought the index reading to 129.3, which was a record high for the second consecutive month and represented a 2.5 percent increase from a year ago.
“Like May, the June index result challenges concerns that increasing wholesale supplies from near-peak-off-lease volumes and rising rental volumes would lead to rapidly declining used car values,” Cox Automotive chief economist Jonathan Smoke said in commentary associated with the latest index update.
“Instead, strong retail demand for recent model year used vehicles is encouraging dealers to buy more vehicles from auction heading into the summer. The increased demand is more than offsetting the higher supply,” Smoke continued.
“The volume of transactions is up more dramatically than supply thanks to real demand from dealers and, in turn, consumers,” Smoke went on to say. “Broadly speaking, the second quarter was supported by continued low unemployment and strong consumer confidence remaining near a 16-year high.”
Fueling the year-over-year rise were prices for pickups and vans, which rose by 7.5 percent and 7.4 percent, respectively. Manheim’s index report also pointed out price rises for SUVs and CUVs (up 2.0 percent) as well as luxury cars (up 1.4 percent).
Falling year-over-year were both compact cars (down 0.4 percent) and midsize cars (down 2.1 percent).
Sliding over the rental market, Manheim noted that rental risk pricing eases, thanks in part to higher volume.
Analysts found that the average price for rental risk units sold at auction in June softened by 4 percent year-over-year, but rental risk prices ticked up 0.2 percent compared to May.
Manheim also mentioned SUVs and CUVs accounted for 32 percent of rental risk sales in June of this year versus 30 percent last June. The share of compact cars fell from 25 percent to 23 percent.
Analysts added that average mileage for rental risk units in June came in at 40,600 miles, an amount 2 percent below a year ago.
Editor’s note: More commentary and analysis from Smoke’s first quarterly conference call will appear in future reports from AuSM.