Cox Automotive Chief Economist Tom Webb has published Manheim’s Used Vehicle Value Index results for May. Full commentary can be accessed here, but below are a few highlights:
• Wholesale used vehicle prices increased in May for the second consecutive month. That brought the Manheim Used Vehicle Value Index to a reading of 124.5 for May, a 0.6% gain YOY – the first since December of last year.
• Consecutive increases in April and May will be temporary, but do suggest that dealers have continued to achieve efficiency gains that are allowing them to bid up auction prices even as gross margins narrow.
• For the first five months of 2016, the SAAR averaged a modest 17.2M – and that was despite heavier fleet sales. In the first five months, new vehicle purchases increased 8% for rental car companies, 11% for commercial fleets, and 38% for government agencies.
• New vehicle inventory levels are reasonable, but the mix is imbalanced. On net, we expect the new vehicle market will have a slightly negative impact on used vehicle residuals in the coming months.
• Total used retail unit volumes rose 6% in the first four months of 2016. Preliminary numbers suggest sales rose again in May. Likewise, CPO sales jumped 6% in the first four months of the year, increasing again in May.
• Average auction prices remained well above year-ago levels in May due to the share shift toward commercial consignment and lower average mileage for both dealer and commercial consignment.
