- The March Index increased to 136.0, a 4.0% year-over-year increase.
- March increases in used-vehicle values offset drops in January and February declines.
- Midsize cars outperformed the overall market, while all other major segments underperformed the overall market.
ATLANTA (April 5, 2019) – Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 0.58% month-over-month in March. This brought the Manheim Used Vehicle Value Index to 136.0, a 4.0% increase from a year ago.
Looking at trends in weekly Manheim Market Report (MMR) prices, March saw the traditional spring bounce in values, particularly in non-luxury vehicles. Three-year-old vehicle values in aggregate saw four straight weeks of price gains in the wholesale market that erased most of the price declines in January and February. The pattern is likely to continue for two to three more weeks, leading to higher prices relative to the start of the year.
On a year-over-year basis, most major market segments saw seasonally adjusted price gains in March. Midsize cars gained more than the overall market, while all other major segments underperformed the overall market.
“Three-year-old vehicles had four straight weeks of price gains in March, which offset the price declines we saw in January and February,” said Jonathan Smoke, chief economist for Cox Automotive, parent company of Manheim. “Used-vehicle prices are starting to experience the annual spring bounce, which is a positive indicator that demand is growing in the market. Affordability concerns, namely increased new-vehicle prices and loan rates, continue to shrink the pool of consumers able to purchase a new vehicle and lead to greater strength in the used market.”
U.S. Vehicle Sales
According to Cox Automotive estimates, used-vehicle sales volume was down 1.7% year-over-year in March. Cox Automotive estimates the March used seasonally adjusted annual rate (SAAR) of sales to be 39.0 million, down from 39.7 million last March and down from February’s 39.4 million rate.
Similar to the used market, the new-vehicle market showed weakness in March, when new-vehicle sales were down 2.2% year-over-year, with one less selling day compared to March 2018. However, the March SAAR came in at 17.5 million, improving versus last year’s 17.2 million. Cars continue to see declines, as sales in March fell 7.9% compared to last year. Light trucks, on the other hand, outperformed cars in March, finishing the month up 0.6% year-over-year. It is anticipated that new-vehicle sales will be down in calendar year 2019.
Combined rental, commercial and government purchases of new vehicles were up 4.5% year-over-year in March, and up 16% month-over-month. Rental (+2%), commercial (+11%) and government (+7%) fleet channels were up year-over-year in March. New-vehicle retail sales were down 4% in March, leading to a retail SAAR of 14.0 million, down from 14.1 million last March.
New-vehicle inventories came in above 4 million units for the second consecutive month.
Rental Risk Pricing
The average price for rental risk units sold at auction in March was down 1% year-over-year. Rental risk prices were up 2% compared to February. Average mileage for rental risk units in March (at 45,200 miles) was up 0.4% compared to a year ago and up 1% month-over-month.
The fourth quarter’s real GDP growth rate was revised down to 2.2% from the originally estimated 2.6%. Downward revisions were caused by lower consumer spending, lower fixed investment, and lower government spending compared to what was initially reported. The Consumer Confidence Index in March declined 6% and is now lower than last year. However, plans to purchase a vehicle in the next six months jumped in March. Plans to purchase had been on a multi-month slide consistent with declining confidence and sales. Initial jobless claims, the number of Americans filing applications for unemployment benefits, hit a 49-year low last week, which points to strength in the labor market.
Manheim® is North America’s leading provider of end-to-end wholesale solutions that help dealer and commercial clients increase profits in their used vehicle operations. Through its physical, mobile and digital sales network, Manheim offers services for inventory management, buying and selling, floor planning, logistics, assurance and reconditioning. With its omni-channel approach, Manheim Marketplace enables wholesale vehicle clients more efficient ways to connect and transact business how and when they want. Approximately 17,000 team members help Manheim offer 7 million used vehicles annually, facilitating transactions representing nearly $61 billion in value. Headquartered in Atlanta, Manheim North America is a Cox Automotive brand. For more information, visit http://press.manheim.com.
About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning, and using cars easier for everyone. The global company’s34,000-plus team members and family of brands, including Autotrader®, Clutch Technologies, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto®, and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents,and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately owned,Atlanta-based company with revenues exceeding $20 billion.www.coxautoinc.com