Based on what Manheim’s Tom Webb observed in the first half of the month, wholesale prices appear to be down slightly in April.

In a Twitter post on Wednesday, the chief economist at Manheim Consulting said used prices in the first 15 days of the month have slowed compared to March.

It’s a bit too early to accurately pinpoint the exact amount of decline, he said, but mentioned to Auto Remarketing in an email that the change was “more than a ‘smidge,’ but less than ‘a lot.’”

In March, Manheim found that wholesale prices (on a mix-, mileage- and seasonally adjusted basis) were up 0.9 percent month-over-month.  

This movement resulted in the Manheim Used Vehicle Value Index reading coming in at 124.4 for the month, an increase of 2.2 percent for the first quarter, and a rise of 3.3 percent on a year-over-year basis.

“The strength of wholesale pricing in 2014 has been consistent with the fundamentals of the retail market,” Webb said when the index was released. “In March, new-vehicle sales sprung back from a weather-induced stall in January and February. Used vehicle retail sales also picked up, even though those sales were less impacted by the harsh weather.”

The index climbed 2.2 percent sequentially during the first quarter and was up 3.3 percent from Q1 of 2013. As of late March, tax refunds had climbed 3 percent, giving consumers more purchasing power in the used-car market, Manheim explained in an analysis released earlier this month.

Another factor driving used values was the winter weather, which wielded stronger-than-usual damage to vehicles leading to higher demand for insurance replacement/loaner cars, Manheim noted. As such, rental companies put off their usual de-fleeting, Manheim indicated, holding on to these cars instead.

“Rental risk units flowing back into the wholesale market remained depressed in March after being at low levels in January and February,” Webb said in that analysis.
“The weather was the chief culprit in keeping these units out of the used-car market. Rental car companies held onto their fleets longer than normal because demand was so high in the insurance replacement segment.”   

As for the full-year, wholesale prices will likely fall in light of greater supply, he noted. That said, Webb explained in the early April analysis that prices should stay hearty in the near-term given massive recalls and a late Easter, two factors that should continue to hold rental units out of the wholesale market for longer than usual.

"The end result so far has been higher prices and higher mileage vehicles in the wholesale used-vehicle market," Webb said. "By the end of the year, we expect pricing to moderate as rental units eventually make their way into the wholesale market and the acceleration in off-lease units becomes more pronounced."