ST. PAUL, MN
– The Automotive Fleet & Leasing Association (AFLA) held its first-ever member-only teleconference June 28 on the outlook for used-vehicle values. The teleconference featured a presentation by Tom Webb, chief economist for Manheim.
According to Webb, wholesale used-vehicle prices (on a mix, mileage, and seasonally-adjusted basis) rose 0.4 percent in May. New-vehicle market forces are applying less pressure to wholesale used-vehicle prices, said Webb. He added that new-vehicle incentive spending remained constrained in the month of May and a greater share of sales was accounted for by redesigned or new models, meaning less direct competition with newer-model used vehicles. The biggest support to used-vehicle values; however, continues to come from the reduced level of new-vehicle inventories. At the beginning of June, the inventory unit count was 10 percent below a year ago and the days supply was the lowest since the initial employee pricing programs offered to retail buyers by the OEMs in the summer of 2005.
In recent months, seasonally-adjusted prices for pickups and SUVs have risen even as relative auction volumes have increased. Part of this is due to a richer mix of vehicles within each of these categories, especially the full-size pickups. Auction values for full-size vans have also risen recently, but have also been accompanied by lower relative volumes – a situation that will likely reverse as the number of end-of-service commercial fleet vehicles continues to grow, said Webb. Wholesale values for compact cars also have increased as consumers gravitate toward smaller vehicles due to higher fuel prices.
The June 28 teleconference was the first in a series of used-vehicle market reports that AFLA will present for its members. The next AFLA member teleconference will occur in September and feature a presentation by Tom Kontos, executive vice president of customer strategies and analytics for ADESA.
For information on how to join AFLA, visit www.aflaonline.org.