Despite a significant reduction in fleet deliveries, new cars and light-duty trucks sold at a seasonally adjusted rate of 14.1 million in July, continuing the year’s impressive 14 million-plus sales pace.
Retail used vehicle sales were also up in July, with a two percent jump for the month resulting in an almost four percent year-to-year gain. Sales continue to be helped by the greater availability of retail financing, especially in the subprime area.
In the wholesale used vehicle market, the Manheim Used Vehicle Value Index recorded its fourth consecutive decline, with a 1.8 percent drop in July. The Index’s 121.2 level at month’s end represented a 3.7 percent decline from a year ago. Though each of the past four monthly declines has been larger than the drop that preceded it, we still consider this an orderly realignment of prices, not a free fall.
Interestingly, a twenty-cent rise in gas prices did not stem the decline in compact car prices at the wholesale level. For late-model small cars, the lower prices were often the result of competitive pressure from the new vehicle market. And for small cars in general, wholesale prices have been hurt by the increased volume and variety of such units at auction.
The decline in new vehicle sales into fleet was solely the result of a July dip (-13 percent) in sales into rental; for the year, however, rental sales remain up fourteen percent. Commercial fleet sales were actually up thirteen percent in July and are up fourteen percent for the year. In the wholesale market, as with the overall Manheim Index, end-of-service fleet prices have fallen significantly in recent months – but they are still high by historical standards. And, fleet remarketers can be encouraged by both short-term and long-term trends. At present, the strongest segment at auction remains vehicles selling in the $8,000 to $11,000 range, the sweet spot for vehicles coming out of fleet. From a longer-term perspective, strong new product introductions in the midsize domestic sedan segment bode well for future resale values.
Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.
Retail used vehicle sales were also up in July, with a two percent jump for the month resulting in an almost four percent year-to-year gain. Sales continue to be helped by the greater availability of retail financing, especially in the subprime area.
In the wholesale used vehicle market, the Manheim Used Vehicle Value Index recorded its fourth consecutive decline, with a 1.8 percent drop in July. The Index’s 121.2 level at month’s end represented a 3.7 percent decline from a year ago. Though each of the past four monthly declines has been larger than the drop that preceded it, we still consider this an orderly realignment of prices, not a free fall.
Interestingly, a twenty-cent rise in gas prices did not stem the decline in compact car prices at the wholesale level. For late-model small cars, the lower prices were often the result of competitive pressure from the new vehicle market. And for small cars in general, wholesale prices have been hurt by the increased volume and variety of such units at auction.
The decline in new vehicle sales into fleet was solely the result of a July dip (-13 percent) in sales into rental; for the year, however, rental sales remain up fourteen percent. Commercial fleet sales were actually up thirteen percent in July and are up fourteen percent for the year. In the wholesale market, as with the overall Manheim Index, end-of-service fleet prices have fallen significantly in recent months – but they are still high by historical standards. And, fleet remarketers can be encouraged by both short-term and long-term trends. At present, the strongest segment at auction remains vehicles selling in the $8,000 to $11,000 range, the sweet spot for vehicles coming out of fleet. From a longer-term perspective, strong new product introductions in the midsize domestic sedan segment bode well for future resale values.
Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.