CARY, N.C. -

Make it four straight months of record-high readings for the Manheim Used Vehicle Value Index.  

In August, wholesale vehicle prices — adjusted for mix, mileage and seasonality — were up 0.75 percent from July, according to the latest report on the index compiled by Cox Automotive chief economist Jonathan Smoke.

The resulting measure of Manheim’s index was 131.3, a 3.4-percent year-over-year increase and, once again, the highest ever reading for this index.

“Wholesale market values continue to show strength as a result of growing retail demand,” Smoke said in the report. “Most of the increase in used-vehicle sales is coming from double-digit year-over-year growth in sales of vehicles less than 4 years old.”

While Cox Automotive estimates that the seasonally adjusted annualized rate for used-car retail sales in August (38.1 million) was down from July (40.1 million), used-car sales have actually climbed 1.2 percent so far this year.

That includes what was best second quarter ever for the used-car market and the first time there was more than 10 million used-car sales in Q2, according to Edmunds.

Overall, there were 10.05 million used-vehicle retail sales in the second quarter, Edmunds said. That’s a 1.7-percent year-over-year uptick  and up 7.9 percent from five years ago.

What’s also up significantly are used-car transaction prices on the retail side.

Edmunds said that consumers paid an average of $19,227 for a used vehicle in the second quarter, the highest ever for Q2.  And it’s the older vehicles where the wallet wallop is happening.

Edmunds noted that vehicles 6 years and older have improved their retention, which is driving this surge. For instance, the retention of original MSRP on a 10-year-car in 2012 was 21.1 percent, on average.

It was at 26.4 percent in the second quarter, Edmunds said.

A 10-year-old midsize SUV had 16 percent retention in 2012; it’s now 32.5 percent.

“Vehicle sales reached historic lows during the recession, and now fewer consumers have an older trade-in when they buy a new vehicle,” said Ivan Drury, Edmunds senior manager of industry analysis, in a news release.

“It’s the basic law of supply and demand. People still want to buy affordable older cars, but there simply aren't as many out there,” he said.

Conversely, deprecation has escalated among later-model vehicles. Retention on 1-year-old used vehicles has slid from 76.6 percent in Q2 2012 to 70.9 percent in the second quarter of this year, Edmunds said, with the impact being felt the most in car segments. 

This late-model decline largely has been driven by heavy off-lease supply and incentive hikes. And, Drury said, an uptick in leasing.

“The surge in popularity of leasing has led to a more disposable mentality about personal vehicles, which has taken a toll on the values of newer used cars,” he said.

The difference in price on a 1- and 10-year-old car has gone from 55.5 percent to 44.4 percent over the past five years, meaning a less affordable used-car market overall, Edmunds said.

But again, the company emphasizes that retail sales are still strong.

In fact, shifting back to the Cox Automotive analysis, analysts are expecting a 3-percent lift in full-year used-car sales thanks in part to demand for replacement vehicles in southeast Texas following Hurricane Harvey.

“The dynamics of the used market are completely different now than they were five years ago, and we don't see this trend reversing anytime soon,” said Drury, the Edmunds analyst.

“Leasing grew steadily until late last year, so the near-new vehicle stock will continue to grow, and it's going to take time to replenish the supply of older used models,” he said. “It’s good news for those who can afford it, but for shoppers who need to find reliable transportation on a budget, this is a challenging scenario.”