November 20, 2017
www.usedcarnews.com
Wholesale Prices Continue Moving Upward
Photo by Jeffrey Kowalsky IN CHARGE: Incoming National Auto Auction Association President Warren Clauss, left, shares a moment with outgoing NAAA President Jerry Hinton as they visit the Dearborn Inn in Dearborn, Mich. Clauss takes the reins of the association during the NAAA convention in Palm Springs, Calif. For interviews with the pair, turn to page 8.
Rush - Dated Material
Wholesale prices climbed again in October as the after-effects of this summer’s hurricanes lingered. The Manheim Used Vehicle Value Index reached 136.3, which was a record high for the sixth consecutive month. This was an 8.1 percent increase from a year ago. The Index adjusts auction prices for mix, mileage and seasonality. On a year-over-year basis, all major market segments again saw gains, including midsize cars. SUVs/CUVs, pickups, and vans outperformed the overall market. “Though wholesale market values continue to show strength as
a result of growing retail demand, most of this price strength can be attributed to the recovery following Hurricane Harvey and Hurricane Irma,” said Cox Automotive chief economist Jonathan Smoke. “Replacement demand combined with a reduction in available supply has caused wholesale inventories to tighten. “The impact to the wholesale market was widespread, resulting in abnormal wholesale price gains for another month.” Black Book’s Used Vehicle Retention Index for October increased to 114.6 from 113.9. This is the second straight month-
ly increase for the Black Book Index, dating back to August when it was at 112.6. The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-yearold used vehicles, as a percent of original, typically equipped MSRP. It is also weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. During the month, vehicle segments such as compact crossovers, full-size cars, full-size crossovers and full-size pickups were a few of the categories that saw noticeable
retention strength due to increased demand during October. “So far this year, we have seen a very strong performance for used vehicle value retention, driven largely by the surprising value shoppers found in the affordable smaller cars after spring, and the huge demand resulting from hurricane replacements in the fall,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “Looking ahead in the next two months, we expect the market to decline slightly but still end this year with a better-than-expected strength in used vehicle values.”
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