Wholesale used vehicle prices increased in December signifying the sixth increase out of the previous seven months. Illustrating continued strength and stability, this brought the Manheim Used Vehicle Value Index – a measure of wholesale prices adjusted for mix, mileage and season – to a reading of 125.7 in December. This represents an increase of 1.5 percent from a year ago and is the Index’s highest level in more than four years.
The Manheim annual Used Car Market report examines the economic underpinnings of the entire used vehicle market and sector-specific trends that influence the supply and pricing of used vehicles.
This report highlights market conditions and buyer and seller strategies within the used vehicle marketplace, provides an update on digital and mobile technology developments. It also includes an annual look at the various industry components, including dealer, rental, repossessions, leasing, and salvage.
On an average annual basis, the Manheim Index rose 1.2 percent in 2015, after a 2014 increase of 1.5 percent. In 2012 and 2013, the Index declined by 1 percent and 1.8 percent respectively. These four consecutive years with annual price movements of less than 2 percent represent the longest stretch of wholesale price stability in the Index’s 20-year history.
“A variety of macro-economic and industry factors have contributed to the ongoing stability and strength we’re experiencing,” said Tom Webb, Chief Economist for Cox Automotive. “We also have to give credit to better and more efficient marketing practices that have enabled commercial consigners to anticipate and respond to – and ultimately minimize – impending swings in wholesale pricing.”
Despite the recent interest hike by the Federal Reserve and analysts expecting further increases in 2016, it is predicted the availability and cost of retail credit will remain favorable for both the new and used vehicle markets throughout the year. Additionally, a favorable economic outlook and continued job growth have added to both lender and consumer confidence.