Data from Manheim shows that the U.S. used car market is off to a hot start in 2015.
Citing strong consumer demand from a stable job market and attractive financing, which has helped the new and used vehicle retail market gain momentum, wholesale used vehicle prices are up 1.3 per cent from a year ago.
“With pricing slightly stronger than expected, consumers continue to see the value in purchasing used vehicles, which remain a profitable part of a dealer’s business,” said Tom Webb, Chief Economist, Manheim, in a written release.
Pickups and vans were the strongest vehicle segment for first quarter wholesale pricing, with pickups rising 5.4 per cent and vans up five per cent on a year-over-year basis, said Manheim. Fewer available vehicles in this segment, along with their popularity in business use, should boost consumer demand.
On the other side of the spectrum, compact cars continued to be the weakest segment with prices down 5.2 per cent in March, compared to the same period last year.
Manheim expects to continue to see favourable economic conditions for the used vehicle market, believing that even a small rise in interest rates won’t hurt the market for financing used vehicles.
“In the used car market, it will be important to see if dealers place the right money on the slightly higher-than-expected number of trade-ins they received in March, something auctions will indicate in the coming months,” said Webb.
