Used-vehicle prices dipped in May, but pickup prices edged up

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In line with seasonal patterns, overall wholesale prices of used vehicles dipped in May from April levels, but prices of used pickups rose, according to data in the Manheim Used Vehicle Value Index, released today.

Modest increases in wholesale used-vehicle supplies, favorable interest rates and franchise dealers who are focusing more on their used-vehicle business, combined to buoy used-vehicle prices last month, Manheim said.

“Readily available retail financing at attractive terms has enabled dealers to achieve healthy profits on the subsequent retail sale of their auction purchases,” the auction company said in a release accompanying the Manheim Used Vehicle Value Index.

Ricky Beggs, editorial director at Black Book, said used-vehicle prices typically start to ease in April but that didn’t happen this year.

Delayed easing

That was because harsh winter weather delayed many spring used-vehicle sales, which in turn led dealers to continue adding to their used-vehicle inventory throughout April in anticipation of later retail sales.

But that just delayed the easing. From May 1 until June 1, the average price of 2008-2012 model-year vehicles fell 0.4 percent, Black Book data shows.

Conversely, in that same time frame, the average price of used full-sized pickups increased 0.6 percent. The average price of what Black Book calls used mid-sized pickups -- trucks such as the Ford Ranger, Dodge Durango and Chevrolet Colorado, which Automotive News designates as compact pickups -- rose 0.5 percent.

Beggs said truck prices are being lifted by demand from the housing, service and construction industries and by higher transaction prices for new pickups.

Room to rise

“As the new transaction price climbs, it opens more room for used to have differentiation from the new and the depreciation is not as great,” he said.

The Manheim index stood at 124.7 in May, down from 124.9 in April but well above the 119.1 reading in May 2013.

The index was started in January 1995 at 100 and measures changes in used-vehicle prices. It is adjusted for vehicle make, model and time of year.

You can reach Arlena Sawyers at asawyers@crain.com.


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