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Record Setting Fifth Straight Month Direct Result of Hurricanes Harvey & Irma
ATLANTA, Oct. 6, 2017 /PRNewswire/ -- The third quarter is one for the record books thanks to an especially active hurricane season, with wholesale used vehicle prices having increased 2.77 percent in September. The Manheim Used Vehicle Value Index – a measure of wholesale prices adjusted for mix, mileage and season – came to a reading of 134.9, which was a record high for the fifth consecutive month and a 6.3 percent increase from the same time in 2016.
"While growing retail demand is strong, most of the pricing strength can be directly attributed to the recovery following Hurricanes Harvey and Irma," said Jonathan Smoke, Chief Economist for Cox Automotive, parent company of Manheim. "Both the replacement demand and reduction in available supply is causing widespread wholesale inventories to tighten, and we expect this to result in wholesale price gains for at least another month or two."
According to Cox Automotive estimates, used car sales improved by 8 percent year-over-year last month, and its September SAAR increased to 40.4 million units from August's 38.1 million units. The retail growth in used sales is coming from vehicles less than 4 years old, which have grown 5 percent in 2017 thus far versus last year's same period. Vehicles less than 4 years old represent the largest age segment of vehicles in the used car market.
An active hurricane season also helped increase new car sales, with replacement demand leading to September new sales volume jumping 6 percent year-over-year. With a seasonally adjusted annual rate (SAAR) of 18.5, this was the highest September reading in three decades and the highest monthly SAAR level since July 2005.
Turning to used vehicle pricing trends, all car segments were up from last year, with especially strong increases once again in pickups and vans. Key third quarter wholesale price trends for all vehicle segments included:
Regarding the top seven unique vehicles according to the Manheim Market Report (MMR), only two of them – both luxury vehicles – depreciated in September. The rest – all midsize and compact – gained value last month with the Ford Fusion also showing a slight yearly gain. For a complete list of the top performing vehicles and their related MMR price performance statistics, please click here.
For rental risk pricing, the average price for these units sold at auction in September was up 4 percent year-over-year and 2 percent compared to August. The average mileage for rental risk units in September of 42,200 miles was 6 percent above a year ago.
"Hurricanes Harvey and Irma are also impacting the overall economy by disrupting the growing momentum leading into the third quarter. Now we have watchful eyes on Tropical Storm Nate – which is expected to hit the Gulf Coast as a hurricane," said Smoke. "While the economy remains strong with the final reading on GDP growth in the second quarter of 3.1 percent – the strongest quarter in more than two years – economic data will be harder to judge any sustained change in trend for the next several months."
Visit Manheim's website to access a variety of company publications, including monthly Auto Industry Briefs, white papers and blog entries.
About Manheim (www.manheim.com)
Manheim is the leading global provider of vehicle remarketing services, connecting buyers and sellers of used vehicles to the largest wholesale used-vehicle marketplace. The company helps dealer and commercial customers achieve results by providing physical and digital auction channels, data analysis, financing, transportation and mobile products and solutions.
Manheim pioneered in-lane vehicle auctions and has been an innovator in both digital and mobile auction platforms. Manheim registers nearly 7 million used vehicles annually, facilitating transactions representing nearly $46 billion in value. Manheim's research and consulting arm, Manheim Consulting, provides industry-leading market intelligence and publishes the widely recognized annual Used Car Market Report. The company offers dealer financing through NextGear Capital, Inc. and transportation services through Ready Auto Transport.
Headquartered in Atlanta, Manheim has more than 20,000 employees in 122 worldwide sites and generates annual revenues of more than $2.5 billion. A subsidiary of Cox Enterprises, Manheim participates in "Go Green with Manheim," the company's sustainability program.
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