ATLANTA and LAWRENCEVILLE, Ga. – Whether looking from the dealer perspective of used-vehicle prices for units running down the lanes or movements in depreciation that finance companies might consider, neither Manheim nor Black Book spotted dramatic shifts when analyzing their respective September data.
First, Manheim determined wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) remained unchanged between August and September, but non-seasonally adjusted prices declined 1 percent during the month. As a result, the Manheim Used Vehicle Value Index stood at 126.9 for September, an increase of 1.7 percent from a year ago.
“The strength in wholesale pricing is explained, in large part, by current and past increases in new vehicle transaction prices (even after adjusted for mix shifts),” Cox Automotive chief economist Tom Webb said in his commentary that accompanied the latest Manheim Index update.
“For example, the new-vehicle component of the Consumer Price Index (which further includes a quality adjustment) has increased by 1 percent over the past three years, and a straight average of new-vehicle transaction prices is up 9 percent since 2013,” Webb continued.
“As such, wholesale used-vehicle prices relative to new-vehicle prices are not out of line with historic norms,” he added. “Additionally, higher retail used-unit sales and stabilizing margins have kept dealers active bidders in the wholesale market.”
Meanwhile, according to Black Book data, the average price of a used vehicle for model years 2011 to 2015 depreciated by 2.3 percent during September, just slightly better than the August reading of 2.4 percent.
Black Book indicated that overall cars saw lower retention in September, ending the month at a 2.6 percent depreciation rate compared with 1.8 percent in August. Trucks as a whole finished with a depreciation rate of 2.0 percent in September.
Editors added that all vehicles are currently averaging a 12-month depreciation change of 16.6 percent.
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