ATLANTA — Used-vehicle value pricing continues to soften following last year’s active hurricane season. The Manheim Used Vehicle Value Index — a measure of wholesale prices adjusted for mix, mileage and season — increased 5.6% from a year ago to 132.0 in December. The reading was the lowest since last August, according to Manheim.

“Most gains since August were a result of the replacement demand following the devastation of hurricanes Harvey and Irma,” said Cox Automotive Chief Economist Jonathan Smoke. “Used-vehicle values are now returning to pre-storm levels. Underlying vehicle depreciation rates have been accelerating to catch up to where prices would have been without the abnormal demand and scarce supply in both September and October.”

Also down at the end of last year were new-car sales, having decreased 5% year over year. And at 17.1 million units for the year, annual new-vehicle sales slipped for the first time in seven years. December’s seasonally adjusted annual rate (SAAR) — down from a record 18.1 million in 2016 — rounded out at 17.8 million, the fourth straight month of over 17 million SAAR and the longest streak of 2017.

While trucks and SUVs saw gains in share, cars continued to see sharp declines as sales fell more than 17% in December compared to the year-ago period.

Cox Automotive estimates used-car sales increased by 4% year over year in December, with the month’s used-car SAAR having increased to 38.9 million units. At 39 million units, used-vehicle sales grew by 1% in comparison with 2016.

As for used-vehicle pricing trends, all car segments — except for midsize cars — were up from last year, with especially strong increases seen once again in the pickup and van categories. Key fourth quarter wholesale price trends for all vehicle segments included: 

• Coming off some relative pricing strength last quarter, compact cars were once again one of the weakest segments in terms of pricing. The category recorded a modest increase of 2.9% compared to last year.

• Midsize cars – as with last quarter – were the weakest segment and experienced the only pricing decline, 0.7%.

• Pick-ups and vans continued to show pricing strength. Pick-ups recorded the most significant increase of all vehicle classes, with pricing rising 10.4% over last December. Vans recorded a 9.9% increase.

• SUVs and CUVs remained steady last quarter and experienced an increase of 5.8% from last December, illustrating slight strength compared to the overall market.

• Luxury car values slightly underperformed the overall market, increasing 5.3% over the same period last year.

Rental risk pricing also weakened in December, with the average price for rental risk units sold at auction last month up 0.3% over 2016. Rental risk prices were down 2% compared to November, and the average mileage for these units at the end of 2017 was 49,700 miles. That’s 15% higher than a year ago.

Looking ahead, a strong stock market, high consumer confidence and low unemployment should continue to drive economic growth in 2018. The tax reform’s positive impact on most households’ take-home pay — approximately 80% — should reinforce consumer spending and help offset the impact of higher interest rates on vehicle loans.

New- and used-vehicle sales combined, according to Cox Automotive forecasts, should be flat relative to 2017 at approximately 56.2 million units. New-car sales for 2018 are expected to total 16.7 million units, down from 17.1 million in 2017. The firm forecasts used-vehicle sales to total 39.5 million units for 2018, which would be up from 2017.

“Used-vehicle value pricing overall in 2018 will look like last year — minus the hurricane — and be stable to higher-than-normal in terms of what we normally see relative to inflation,” the firm stated in its report. “A weak first quarter is predicted, followed by strong second and third quarters.”

Smoke added: “Expect pricing weakness for the next few months thanks to depreciation accelerating for most vehicles playing catch up with the abnormal pricing performance in September and October. As we look ahead into March, we will likely miss the typical ‘bounce’ in used-vehicle prices as tax refunds will again be delayed as part of the IRS’ effort to combat identity fraud, but prices should be on firmer footing by April as retail demand kicks into gear.”