February 2015 Wholesale Used Car Values Trend Report

Wholesale prices: back down to earth just a little…

Perhaps it had to happen: after four months of consecutive increases, wholesale prices took a slight dive in February, according to Manheim consulting’s used vehicle index  (adjusted for mix, mileage and season). But Manheim suggest that used vehicle prices are still 1.5% up year-on-year. And by most measures, wholesale prices remain above trend.

It looks as if a combination of increased used vehicles entering the wholesale market together with a tailing off of retail demand (save the CPO segment) is responsible for this. Although, dealers improving their inventory management and new vehicle manufacturers reining in prices are also likely to have contributed.

Used vehicles: sales and profits keep rolling… decreased weekly tax refunds not an issue

Decent used vehicle operating results appear to be the rule across most dealerships. As noted above, Dealerships have raised their inventory management game to take advantage of the greater vehicle mix and offered by lease returns and newer trade-ins. In  January CPO sales jumped a massive 17%; in February growth slowed to a still very respectable 10.3%. The January-February sales blitz has produced record year-to-date CPO sales of more than 392,000 units, up more than 13.6% from what was already a record pace in 2014.

Despite total tax refunds being down year on year for the first three weeks of February (13.8%), Manheim report that the lower segment has been impacted, but there is little evidence of other segments being hit due to the reduced level of refunds.

Rental risk market: pricing and volumes increase

February Rental risk unit prices, adjusted for mix and mileage, showed an increase on January’s prices. But they were down year on year in comparison to extremely strong levels last year. Volumes were strong, and average mileage climbed to more than 48,500 miles.

Market segment trends 

Manheim suggest that pricing in the CPO wholesale segment continues to take a bashing. That can be explained by the double whammy of slow sales and competition in the form of high supply from the new vehicle sector. Meanwhile, the market appears to have developed a taste for cargo vans as demonstrated by continued strong pricing in the sector.

Posted by: Farra Majid on Saturday, March 7th, 2015 at 3:51 pm in DEALERS, INDUSTRY