Tom Webb
Manheim Consulting
Chief Economist
Manheim Used Vehicle Value Index – May 2012
Wholesale prices are softening – the Manheim Index fell 0.8% from April and is down 2.1% compared to the Index’s all-time high reading. The economy weakened in May and new vehicle sales failed to meet expectations.
Used Vehicles Still Doing Well Overall:
Volume of used vehicles retailed continued to rise and dealership profits on those sales were strong.
Softer New Car Sales Not Necessarily Bad News:
New inventories remained in check and average transaction prices rose – should help support future used vehicle values.
Watch Out for New Vehicle Incentives:
Most troubling has been reported resurgence of stair-step incentive programs, which have been destructive to used vehicle residuals.