In the latest Manheim Used Vehicle Value Index report out of the U.S., analysts found the May reading of 123.8 is close to its historic trend line.
“A look at the Manheim Index over its entire 20-plus year history shows that pricing over the past five years has been not only elevated, but stable,” said Tom Webb, chief economist for Manheim, in the report.
“Sure, there have been intra-year swings; but over the longer time span, the movements have been modest,” said Webb.
He added even with the recent decline in pricing, the index is only 3.1 per cent lower than the peak reached in 2011, one that had been boosted artificially because of the supply disruption that resulted from Japan’s earthquake.
Webb anticipates a movement below trend as wholesale prices are certain to grow, but the degree of deviation will depend on the labour market and credit conditions to continue to support retail used unit volumes and profits.
The report also looked into the used vehicle retail market, which remains solid as total used vehicle retail sales rose five per cent in April. Record profits can be attributed to more operating efficiency from dealers.
Certified pre-owned (CPO) sales continued their record pace, with sales up 12.2 per cent in May and 11.6 per cent year-to-date.
Pickup sales in the used segment stayed strong in May, while compact cars remained weak. Luxury cars continued to underperform the overall market.
