Defying expectations, wholesale prices for certain sectors of used cars at record highs, according to an index that tracks the market for used vehicles.
Demand is strong and inventories are limited, according Cox Automotive’s Manheim Used Vehicle Value Index.
Manheim found that wholesale prices reached an eight-month high, with year-over-year growth I in all sectors except luxury vehicles.
“An unexpected bump in the last two weeks of June brought the second quarter to a stronger close than we anticipated,” says Jonathan Smoke, chief economist for Cox Automotive. “The recent increase in sales helped the market regain ground in terms of keeping price performance ahead of 2017 numbers. Used-vehicle prices remain higher now compared to where they were at the beginning of any of the last three years.”
The Manheim index is at 134.9, which is a 4.3 percent increase from a year ago and its highest level since last October.
Used-vehicle sales volume increased by 2 percent year-over-year in June, with an estimated 39.8 million seasonally adjusted annual rate.
“Dealers aggressively search for inventory, possibly in anticipation of future price pressure driven in part by higher interest rates and the potential impact of tariffs on new cars and new-car parts,” according to Cox Automotive. “With new-vehicle affordability challenged, used vehicles are often a smart alternative by consumers. Even the compact-car segment has shown strength.”