Manheim: Used Vehicle Prices Fell In Oct.
Price changes for selective market classes for Oct. 2013 versus Oct. 2012. Courtesy of Manheim.
Wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) declined in October after increasing the last four months. According to Manheim Consulting, the Manheim Used Vehicle Value Index reading was 122.3 in October, which represented a 0.3% increase from its year-ago level.
With off-lease volumes set to accelerate next year, franchised dealers should see higher volume again in 2014, says Manheim.
And in the short term, wholesale prices on a year-over-year basis will now begin to bump up against the inflated levels created by Hurricane Sandy in October 2012. With respect to retail demand, we believe that the market will remain favorable for dealers, but that the impressive improvements achieved over the past two years will be hard to repeat, according to Manheim.
The annualized new vehicle selling rate (on a three-month moving average basis) has started to plateau in the 15.5 to 15.7 million ranges. The consensus forecast of slightly more than 16 million sales in 2014 is reasonable; but even if achieved, that would represent a much smaller percentage gain than what we posted in each of the past four years, says Manheim.
But pricing power has not slowed — and that’s even more important. Average transaction prices continue to rise as the result of lower net incentives, higher sticker prices and the consumer’s desire for more heavily contented vehicles, says Manheim.
In October, total used unit retail sales rose 3.6%, resulting in a 3.5% year-to-date increase, according to CNW. Within that total, manufacturer certified pre-owned (CPO) sales rose 20.6% in October. Year-to-date CPO sales are 15.3% ahead of last year's pace.
October Used Vehicle Index courtesy of Manheim.