Manheim Expects to See Dealers to Report Strong Used Results, NADA Looks at How Used Supply Breaking Out by Segments February 12, 2015
Webb_Tom_Manheim


Wholesale Prices Strong and Seeing Stable Environment

Tom Webb
Chief Economist
Manheim Consulting

Whole price increased continued for the fourth straight month, with the Manheim Used Vehicle Value Index reaching 125.3 in January. That was up 2.5% from the index reading one year earlier. It appears to be a very stable environment for wholesale prices, now at their highest level since August 2012. Off-lease volumes are high but are not playing the role in softening wholesale prices that had been expected by most analysts.

Here’s the latest Manheim Used Vehicle Value Index report

Wholesale Prices Not in Conflict with Rising New Vehicle Transaction Prices:
Or with strong retail sales results reported by most dealers.

Expect Publicly-Traded Dealers to Report Q4 Rise in Used Volume and Profit:
Expect labor market and credit conditions to help used sales for rest of 2015.

Pricing Strength Across Market Segment Price Tiers Consistent in January:
Seemed to be uninfluenced by shifting volumes for various segment price points.
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Banks_Jonathan


How Growing Used Supply Is Likely to Affect Market this Year

Jonathan Banks
Executive Automotive Analyst
NADA Used Car Guide

New vehicle sales have returned to pre-recession levels, used vehicle supply ― especially off-lease supply ― is quickly recovering. Personal lease volume improved by about 9% to 3.14 million units in 2014 and commercial leases added another 500,000-plus units. That makes for the highest figure since 1999’s record high of 3.3 million units. The number of personal leases set in 2015 should surpass this figure by landing somewhere in 3.3 to 3.4 million range.

See the NADA Perspective report on used vehicle supply

Seeing Rapid Rise in Leasing Combined with Program’s Shorter Holding Cycle:
Volume growth for younger models will rise more dramatically than it will for older vehicles.

Off-Lease Supply Should Rise 20% to 2.35M Units this Year:
Retail supply should increase by more modest 7%, and off-rental supply up by only 1%.

Prices of Used Vehicles Up to 8 Years Old Should Drop 2% to 2.5% from 2014:
Subcompact, compact, and mid-size cars should suffer the most this year in prices.
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