Used Car Prices May be Softening, but Conditions Can be Strong for Dealers October 7, 2014

Prices Down in September but Market Conditions Stronger for Dealers

Tom Webb
Chief Economist
Manheim Consulting

Wholesale used vehicle prices continued declining for the fifth straight month in September. The Manheim Used Vehicle Value Index reading was 121.4, down 1.1% from a year ago. Trade ins and lease turn-ins brought higher-than-desired used vehicle inventory levels for franchised dealers. Dealer who priced right quickly retailed them and then purchase from growing supply of auction consigned units. Independent dealers also increased purchasing activity given a slight improvement in retail sales and lower wholesale pricing.

Here's the latest Manheim Used Vehicle Value Index report

Retail Sales Had Better September after August when Used Declined More than 9%:
Strong new vehicle sales stole some used buyers, but resulting trade-ins were then retailed.

Pickups and Vans Strongest, but All Market Classes Showing Price Easing on Seasonally Adjusted Basis:
Luxury car price decline slowed, which could be good for lessors with large luxury volume coming back soon.

Vehicles in $9K to $10K Price Range Continued to Show Weakest Relative Price:
Segment may be helped in coming months by falling gasoline pump prices.
Spinella_Art_ head shot

Retail Used Vehicle Sales Volume Unchanged from August

Art Spinella
CNW Research

Retail used vehicle sales reached 3.8 million in September, a 4.3% gain over a year ago and basically unchanged from August. Franchised dealers gained market share from a year ago and last month, while independent dealers lost share from 34% to 33.4%. Franchised dealers were up 6.6% in units, and independent dealers were up 2.4% in units versus year ago. Private party sales saw a yearly gain of 3.2% but a large drop of 10.6% from August.

Retail used vehicle sales figures for September from CNW Research

Transaction Prices up Nearly 18.5% Vs. Year Ago, but Behind August by 1.2%:
Year-over-year gain is primarily due to improved inventory of younger vehicles including off-lease models.

Independents Had 1.7% Price Gain vs. Year Ago and Down 0.11% from August:
Total value of used vehicles sold was $40.86B, a 16.9% gain over year ago, but down a third of a percent from August.

Number of Sub-prime Buyers Leaped 31% from Year Ago and Nearly 2% Over August:
Buy-Here/Pay-Here saw an 18% gain in unit sales vs. September 2013.
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