ATLANTA — Used-vehicle sales continued their strong performance in the wholesale market in July, as an "abnormal bounce" that began in June continued through July with a 1.51% increase in overall values. The increase brought the Manheim Used Vehicle Value Index for the month to 136.9, a 5.1% increase from a year ago.
Pricing from the Manheim Market Report (MMR) increased as a result of "a strong economy at its peak, with mounting affordability challenges for the consumer that favor growth in used-vehicle sales at the expense of new.
"The catalyst for even stronger price movement this summer is the fear of import tariffs leading to higher prices in the future,” the firm noted in its report. “Higher prices and the related declining level of supply create a psychological feedback loop for consumers, encouraging buying now with the expectation that prices may be higher later.”
The past year has brought price gains in all of the major market segments, and more affordable vehicles have seen the greatest increase in value. Compact cars and midsize cars have outperformed the market, while vans, utility vehicles, and pickups have underperformed the overall market.
Used-vehicle sales volume increased by 3% on a year-over-year basis in July. The annualized pace of used-vehicle sales is up 1% over last year, led by franchised used-vehicle sales and private party used-vehicle sales. Manheim's estimate of the July used SAAR of 39.2 million would be the strongest July in six years.
New-vehicle sales in July fell 3% from a year ago. July’s SAAR came in at 16.7 million, which was flat vs. last year’s 16.7 million SAAR. July is just the second month this year the SAAR came in below 17 million. Cars continue to see sharp declines as sales in July fell 17% compared to last year. Light trucks outperformed cars in July and were up 4% year over year. New vehicle sales on a year-to-date basis are up 1% vs. last year, according to Manheim.
Fleet sales have bolstered the new vehicle market in 2018, but fleet purchases declined in July relative to June. Despite the decline, the volume of fleet sales was up 26% from a year ago and 9% year-to-date. Retail sales are down 0.2% year-to-date, but July saw the strongest retail SAAR (14.7 million) for the year.