Wholesale used-vehicle prices on an annual average basis increased 7.4 percent in 2010, the largest single-year increase in the history of the Manheim Used Vehicle Value Index.
The index, which measures changes in used-vehicle prices, stood at 124.4 in December. That is up from 124.3 in November 2010 and 117.5 in December 2009. The index is adjusted for vehicle model mix, mileage and time of year. It started in 1995 at 100. But despite continued heavy demand for used vehicles, which are in short supply, used-vehicle prices should stabilize in 2011, according to Tom Webb, Manheim’s chief economist.
“We’ve had such a big run-up [in prices], and we’ve reached some limitations imposed by new-vehicle pricing,” Webb said.
He said used-vehicle prices in the fourth quarter of 2010 held up well because manufacturers and dealers did a good job of clearing out new 2010 models. Also, the design of many new 2011 models are significantly different from their late-model predecessors.
That means “there is not as much direct competition between the new and nearly-new units,” Webb said.
Citing preliminary data from CNW Marketing Research, Webb said used-vehicle sales increased about 4 percent in 2010 to about 37 million units.