Manheim: Wholesale pricing continues expected decline, KBB: Still projects year will end slightly higher than 2013 September 10, 2014

Prices Continued Dropping, but Returning to Historic Trend Levels

Tom Webb
Chief Economist

August saw 0.7% decline in wholesale prices, 4th consecutive monthly decline. The Index came in at 121.8, down 0.4% from a year ago. Manheim sees wholesale pricing trend returning to trend levels for entire series back to 1995. That took place after an extended period of exceptionally strong prices. Increased wholesale supplies and moderating retail demand are also playing their part.

Here’s the Manheim Used Vehicle Value Index for August

Retail Used Unit Sales by Dealers Declined for 3rd Consecutive Month in August:
Dealers are reporting that turn rates are good and net margins are strong.

Rental Risk Units at Auction Saw Prices Decline for 4th Consecutive Month:
New vehicle sales into rental up 10% in August; increased flow back into wholesale is inevitable.

Pickups and Vans Only Major Market Classes up Year-Over-Year:
Luxury cars continued having largest decline, but pace of decline wasn’t out of line with overall market.
Gutierrez_Alec_KBB_2014 photo

August Used Vehicle Values Continued Four Month Decline Trend

Alec Gutierrez
Senior Analyst
Kelley Blue Book

August used vehicle values saw continuation of a four-month trend with declines from the previous month; each vehicle segment was down from July 2014. Kelley Blue Book still projects that 2014 will end slightly higher in prices than 2013 saw; but the gap in year-over-year vehicles price gains has thinned way down – from $711 in May 2014 to just $165 in August 2014.

Check out the latest Blue Book Market Report

Segments with Largest Declines Were Luxury and Near-Luxury at 3.2% and 3.3%:
Best performing segments were van and full-size SUV, down only 0.5% and 0.7%.

In Luxury, Entry-Level Luxury Was Worst Performing – Down More than 3%:
Segment has declined a significant 7.2% since May, and down 4.2% from last year.

Subcompact Segment Approached 3-Year Low – $241 Lower than in 2013:
Full-size pickups declined 0.9% from July, most likely from normal seasonal depreciation.
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KBB road testing sedans
2014 Compact Sedan Comparison Test — Kelley Blue Book

The KBB team road tested pop­u­lar com­pact sedans, which are see­ing big sales num­bers from being cheap, effi­cient, and increas­ingly refined.

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Beggs_Ricky_Black Book_Sept 8 2014
Cars and Trucks Adjust at Similar Levels

Used vehi­cle sup­plies con­tinue to increase, low­er­ing the level of aggres­sive bid­ding. It was a softer mar­ket with more sea­sonal inter­est in trucks.

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