ATLANTA and LAWRENCEVILLE, Ga. -

Both Black Book and Cox Automotive reported surging wholesale prices as nearly the entire U.S. wrangles with frigid weather conditions.

While Cox Automotive data is showing that dealers’ retail used inventory might be at what experts see as “normal” levels, Black Book shed light on how used-car managers are keeping their lots filled with units ready to stand tall on the front line.

“Auction sales rates continued with their upward momentum again this past week. Select locations, particularly in the Northeast, are still not seeing the same level of increased demand,” Black Book analysts said in their newest installment of Market Insights. “However, other parts of the country are seeing high levels of success as all types of buyers are actively engaging in the bidding, from your large buyers to smaller independents to franchise.

“The presence of physical bidders is appearing to play a role in the level of success. The lanes with bidders physically present are seeing the highest conversion rates,” Black Book continued.

“In recent weeks, the dealer lanes were experiencing some increases in no-sales, but this past week these same lanes saw more ‘if-bids’ instead of no-sales. This is just another sign of increased demand and the buyers’ willingness to step-up the price they’re willing to pay,” Black Book went on to say.

Meanwhile, along with providing the mid-month reading of the Manheim Used Vehicle Value Index, Cox Automotive also indicated that used supply stable.

Using a rolling seven-day estimate of used retail days’ supply based on vAuto data, Cox Automotive said that used retail supply is at “normal” levels, which is 45 days.

Cox Automotive added that wholesale supply ticked up to 24 days for the most recent seven-day period. What the company considers to be normal supply on the wholesale side is 23 days.

More details about Manheim index

Cox Automotive determined that wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) jumped 3.31% during the first 15 days of February compared the first part of January. This movement pushed the mid-month Manheim Used Vehicle Value Index to 168.4, representing a 17.4% increase year-over-year.

Analysts elaborated about the accelerating value pace by examining Manheim Market Report (MMR) prices.

Cox Automotive explained the Three-Year-Old MMR Index — which represents the largest model year cohort at auction — generated a 1.0% cumulative increase during the last two weeks.

Furthermore, analysts added this observation spotted over the first 15 days of February. They said MMR Retention — which is the average difference in price relative to current MMR — averaged 100.9%, and the sales conversion rate also has increased this month.

“Sales efficiency last week was more than 7 percentage points higher than the average sales efficiency in February 2020,” Cox Automotive said in commentary that accompanied the index update.

“The latest trends in the key indicators suggest used vehicle values are likely to continue to see appreciation in the days and weeks ahead,” analysts continued. “Traditionally values do increase each spring, but the increases typically start in March and coincide with the distribution of tax refunds.”

Looking at the data by vehicle segment, each of the six categories Cox Automotive tracks for the index moved higher year-over-year with pickup prices leading the way with a 32.4% spike.

Also rising by double digits were prices for luxury cars (up 16.3%) and CUVs/SUVs (up 13.7%).

Prices for vehicles that often retail during tax season didn’t rise quite so dramatically as Cox Automotive pegged the increase for compact cars at 3.6% and midsize cars at 7.3%.

Van prices moved 8.7% higher, according to Cox Automotive.

And if used-car managers are searching the off-rental lanes for low-mileage units, they might be hard-pressed to find many. Cox Automotive said average mileage for rental risk units crossing the block during the first half of February stood at 52,500 miles; that’s 1% higher compared to a year ago and 5% above what analysts noticed in January.

Not only are rental risk units carrying higher, Cox Automotive reported prices posted during the first 15 days of February are up, too, increasing 8% year-over-year and 1% compared to January.

Black Book’s weekly price analysis

As they do through each installment of Market Insights, Black Book analysts reported how much wholesale prices changed on week-to-week basis.

Overall, Black Book said wholesale prices have increased 0.28% week-over-week with car segments rising 0.39% and truck categories climbing 0.22%, all on a volume-weighted basis.

Of note on the car side, values of compact cars rose more than 1%, the only one of the nine categories to do so.

“Compact cars, a segment that traditionally sees increased demand as a result of spring and tax season buying, has been seeing continual increases in recent weeks. This past week was no different,” Black Book said in the newest Market Insights.

And if dealers can’t find compact cars that find their inventory strategy, they appear to be turning to equivalents in the truck space, creating a combine 1% increase for subcompact and compact crossovers.

“The entry-level crossover segments, subcompact and compact, are gaining steam with increased rates of appreciation this past week. The price point makes them a desirable option for dealers preparing for the spring/tax season market,” Black Book said.

“Subcompact luxury crossovers have been on an upswing in valuations in recent weeks. But this past week, the values took a dip as the available volume on the lanes increased,” analysts added.