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Manheim Index follows retail lead higher in December

A surge in retail activity to close 2019 created a lift in wholesale prices in December, according to the analyst team at Cox Automotive.

Those analysts noticed that wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 1.54% month-over-month in December. That movement brought the Manheim Used Vehicle Value Index to 141.1, representing a 2.5% increase from a year earlier.

Following a normalizing trend in weekly Manheim Market Report (MMR) prices at the end of November, Cox Automotive reported this week that December saw stability, and even gains, in many segments. Analysts calculated that 3-year-old vehicle values in aggregate were up 0.1% for the month.

As a result of the stabilization at year-end, Cox Automotive determined overall wholesale prices finished 2019 at a “historically more normal” level of 90% relative to the value at the beginning of the year but well below the performance experienced in either of the last two years.

On a year-over-year basis, luxury models, SUV/CUVs and midsize cars saw seasonally adjusted wholesale price increases in December. Those midsize cars led the way with a jump of 4.8% while the luxury units as well as SUV/CUVs each rose by 1.8%, according to Cox Automotive’s data.

Meanwhile, analysts noticed that prices for pickups, compact cars and vans each finished 2019 below year-ago levels.

Vans dropped the most as Cox Automotive pegged the decline at 3.0%. Analysts added that compact cars softened by 1.2% while pickups edged lower by 0.4%.

Cox Automotive chief economist Jonathan Smoke dissected the data further and offered these assertions.

“Used-vehicle values ended the year with an increase, as the pace of retail used sales grew both month over month and year over year,” Smoke said. “The strong December pace contributed to a 2.6% increase for used retail sales in 2019 helping offset the weakness in new retail sales.

“Payment affordability challenges in new grew demand for used. New retail sales declined by 4% in 2019, but total new light vehicle sales still came in above 17 million — but just barely — according to our Kelley Blue Book team,” he continued.

“The key reason the new market managed to hit 17 million was another year of increased fleet sales,” Smoke went on to say.

And speaking of a place where fleets often are leveraged, Cox Automotive also touched on how rental-risk pricing behaved to finish 2019.

Analysts determined the average price for rental risk units sold at auction in December increased 3.5% year-over-year and 1.5% on a sequential comparison.

Cox Automotive noted the average mileage for rental risk units in December came in at 51,400 miles, representing a 6% jump compared to a year ago and 5% versus November.

Source: Auto Remarketing

Cox Automotive