Wholesale prices of used vehicles in June fell 1 percent from the previous month’s level but were 4 percent higher than in June 2013, according to the Manheim Used Vehicle Value Index released today.
Strong retail demand, driven at least in part by favorable credit conditions, is keeping used-vehicle prices high, says Manheim chief economist Tom Webb.
The index has risen for four consecutive quarters and the increases have been “modest,” he says.
“That’s a good thing -- the modest part,” Webb told analysts and reporters during the company’s quarterly conference call today. “In reality that reflects stability in the marketplace. And generally speaking, very few players in our industry benefit from volatility in pricing.”
The index, adjusted for model mix, mileage and time of year, stood at 124.0 in June, down from 124.7 in May and up from 119.7 in June 2013. The index started in January 1995 at 100 and measures changes in used-vehicle prices.
Manheim’s data also show that the average price of used pickups in June remained strong and registered an 8 percent increase over June 2013. Though the overall pickup market likely will show “some volatility” with the introduction of the aluminum-bodied Ford F-150 this year, Webb says he does not expect it to affect prices of used pickups.
“A large number of pickups sold at auction are high mileage and less susceptible to swings in the new vehicle marketplace,” he says. “Currently the average mileage on a pickup sold at auction is over 110,000 miles.”
Additionally, the Manheim index average for the quarter was 1 percent higher than the first quarter of 2014.