5th Monthly Increase in Used Vehicle Value Index
MANHEIM CONSULTING -- May marked the fifth consecutive monthly increase in wholesale used vehicle prices on a mix, mileage, and seasonally adjusted basis (see charts above). The Manheim Used Vehicle Value Index now stands at 109.1, which resulted in the first year-over-gain in pricing since October 2007. May's rise in wholesale pricing was a result of continued favorable supply/demand forces, an improvement in consumer confidence, and better availability of retail financing. All of these forces will continue, or strengthen, in the months ahead.
The Conference Board's consumer confidence index posted large gains in both April and May, which brought the index back to its highest level since September of last year. Not unrelated, the Manheim Index also moved back to its highest level since September of 2008 (see chart below). Consumer confidence is an important indicator of the consumer's willingness to take on a big purchase such as a used vehicle. The consumer's ability to buy has been helped by the greater availability of retail financing. In particular, many lenders have been willing to advance larger loan amounts for a given vehicle.