Thursday, March 12, 2009

Wholesale Used Vehicle Prices Rise in February


MANHEIM CONSULTING -- Wholesale used vehicle prices increased significantly again in February. Seasonally adjusted, February’s rise was 3.7%, which came on the heels of a 3.8% increase in January. The Manheim Used Vehicle Value Index now stands at 105.5, which represents a year-over-year decline of 2.4%.

Some analysts have suggested that the rapid rise in wholesale used vehicle pricing is a precursor to an improvement in new vehicle sales and may even point to a recovery in the overall economy. It’s more likely, however, that the turnaround in wholesale used vehicle values is a necessary, but not a sufficient, condition for a better new vehicle market. That’s especially true given that the recent rise in auction pricing has been driven in large part by supply dynamics that were created by the unprecedented slowdown in new vehicle sales.

HT: Scott Grannis,
Calafia Beach Pundit, mentioned tonight on CNBC's The Kudlow Report.

2 Comments:

At 3/13/2009 1:45 AM, Blogger Zach said...

It seems to me this would is a sign that consumer confidence in the economy is at its lowest point yet. If a potential buyer believes the economy will turn soon then they will wait to buy that new car they want. If they believe the long term outlook is grim and they believe it will be a long time before they can comfortably buy a new car (future expectation of job security) then they might compromise now on a used car. I believe this is essentially Milton Freidman's Permanent Income Hypothesis.

-Zach UM Flint

 
At 3/13/2009 10:53 AM, Blogger bobble said...

could this be related to the drop in the price of gas?

high gas prices decimated the value of big cars, now demand is returning?

just a thought

 

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