Wholesale used vehicle prices increased 8.95% month over month in June, bringing the Manheim Used Vehicle Value Index to 149.3, a 6.3% increase from a year ago and a new record-high for the Index, according to Cox Automotive.
Improvements in the Manheim Market Report (MMR) were seen over the four full weeks of June, resulting in a 7.1% cumulative increase on the three-year-old Index, according to Cox. On a year-over-year basis, most major market segments saw seasonally adjusted price increases in June.
MMR Retention, which is the average difference in price relative to current MMR, was greater than 100% every day in June and averaged 102.4% for the month, Cox announced. The MMR Retention trend reflected that vehicles were selling above current MMR values and was a continuation of the price trends in May and a reversal of what happened in late March and April.
“We have enjoyed a dramatic and rapid recovery in the auto market,” said Jonathan Smoke, chief economist, Cox Automotive. “However, the next three to six months could see some reversing trends as COVID-19 case growth threatens to stall the job recovery, credit conditions could deteriorate rapidly with the expiration of stimulus benefits, and additional waves of supply will hit the used vehicle market later this summer when demand is usually softer.”
Total used-vehicle sales volume was down 12% year-over-year in June, according to the report. The June used seasonally adjusted annual rate (SAAR) is estimated at 36 million, down from 39.8 million last June but up from May’s 32 million rate.
Used-vehicle sales in the U.S. are recovering more quickly than new vehicle sales. In June, new-vehicle sales were down 27% year over year, with one less selling day compared to June 2019. The June SAAR came in at 13.0 million, a decrease from last year’s 17.2 million but up from May’s 12.3 million rate.
Meanwhile, the average price for rental risk units sold at auction in June was up 3.4% year over year. Rental risk prices were up 8.9% compared to May. Average mileage for rental risk units in June, at 43,500 miles, was down 7% compared to a year ago and down 6% month over month.
Consumer Confidence in June increased 14.2% and left confidence down 21% year over year. Plans to purchase a vehicle in the next 6 months improved slightly in June but remained slightly below June last year.