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Duration of significant wholesale-price climb still uncertain

Wholesale-price increases accelerated as June and likely the most tumultuous second quarter in anyone’s memory neared an end.

How long the fuel for that wholesale-price climb will last is almost as challenging to project as when the coronavirus pandemic will stop influencing the auction and dealership worlds.

Black Book, Cox Automotive and J.D. Power Valuation Services all shared how wholesale prices have increased in recent days, while Black Book reiterated its longer-term pricing forecast, too.

According to its latest COVID-19 Market Update released on Tuesday, Black Book indicated its volume-weighted data showed overall car segment values increased 1.91% this past week.

In fact, all car segments experienced increases, with the most notable jumped connected with summertime rides as the sporty car segment posted a gain of 2.45%. Analysts also noted the prestige luxury car segment was the only segment to have an increase of less than 1.0% this past week.

“However, it is still notable as this is a segment that rarely increases,” Black Book said in its report.

Meanwhile, Black Book’s volume-weighted data showed values in the overall truck segment — including pickups, SUVs and vans — increased by 1.15% last week with all segments rising except full-size vans.

Analysts mentioned the sub-compact crossover and sub-compact luxury crossover segments led the increases in the truck space at 2.53% and 2.52%, respectively.

“These segments have been slower to rebound compared to the larger compact crossover segment,” Black Book said. 

Over at Cox Automotive, chief economist Jonathan Smoke touched on wholesale prices in Tuesday’s COVID-19 Auto Market Update video.

“Used-vehicle values keep rising,” Smoke said. “Average model-year 2017 wholesale prices increased 1.7% last week, and retail prices increased 0.6%. As of this weekend, wholesale prices are up 5.1% from the beginning of the year and 2.1% from the prior peak in Week 11, while retail prices are up 0.5% for the year.”

And J.D. Power Valuation Services senior director Larry Dixon sent a message to Auto Remarketing on Wednesday, recapping what wholesale-price movements that firm is seeing.

Dixon indicated wholesale prices have improved 22 percentage points during the past 10 weeks and are now 7% higher than at the beginning of March.

“Wholesale prices are exceptionally strong at the moment and the consistent growth week to week provides no indication that prices will fall materially near-term,” Dixon said. “The robust pace of retail sales since the end of May also supports a positive outlook, as dealer demand for replacement inventory remains high.”

Black Book included both a short-term outlook for wholesale prices, considering the rest of the summer and into fall, as well as long-term projections for 36-month residual values and where they might land by the summer and fall of 2023. Those forecasts are viewed through the prism of the most likely economic scenario as well as a more severe situation.

“We project a drop in wholesale prices compared to a pre-COVID-19 baseline this summer/fall, as the U.S economy suffers through the effects of COVID-19,” Black Book said in connection with the most likely scenario. “We anticipate that later this summer and fall, the wholesale prices will be between 10% and 15% lower than originally projected before the pandemic, due to a glut in supply and much weaker demand. 

“Prices will start to recover in 2021 as the economy becomes stronger. We also anticipate that older (6-year-old), cheaper vehicles in average condition will not decline as much due to increased demand for these units,” analysts continued.

Under a severe recession scenario, Black Book analysts added, “We project a drop in wholesale prices of more than 20% later in the summer and fall, compared to a pre-COVID-19 baseline, with a slow recovery in 2021. The effects of the pandemic and recession will still be impactful in 36 months, and we project a 10% market level decline of wholesale prices as compared to pre-COVID-19 projections for the second half of 2023.”

Senior editor Joe Overby contributed to this report.

Kontos offers clarity about strong May wholesale price gains

One of the signature moves by ESPN college football commentator Lee Corso when trying to emphasize a point includes holding up a pencil and telling his colleagues on the TV program, “Not so fast, my friend!”

Well, KAR Global chief economist Tom Kontos did a bit of an impersonation this week when sharing the company’s wholesale price information for May.

According to KAR Global Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale prices in May averaged $11,743, representing a rise of 22.1% compared to April and 0.7% relative to May of last year.

“When looked at on an aggregated basis, wholesale used vehicle prices in May appeared to more than make up for losses in March and April resulting from the COVID-19 pandemic,” Kontos said in his latest installment of the Kontos Kommentary.

“However, with the remarketing industry having undergone significant changes in sales volumes and composition, aggregated numbers often mask lingering weakness in wholesale prices relative to pre-COVID levels that are revealed when disaggregating the data by sale type, model year, model class, etc,” he continued.

“Auctions are selling proportionately more younger, lower-mileage, higher-dollar units, with more sales from commercial consignors than dealer consignors, including more factory and captive finance sales,” Kontos went on to say. “This ‘richer mix’ of vehicles is biasing average prices upward. And sales volumes in May were 75% of year-ago and pre-COVID/February levels, thus representing a more restricted picture of total market conditions.

“Nevertheless, wholesale prices in May did experience a significant rebound and represented a healthy balance between offered supply and dealer demand,” he added.

KAR Global also reported average wholesale prices for used vehicles remarketed by manufacturers in May rose 12.8% month-over-month and up 4.8% year-over-year.

The company said prices for fleet/lease consignors jumped 27.3% sequentially in May but edged 0.1% lower year-over-year.

Finally, KAR Global said average prices in May for dealer consignors climbed 15.3% versus April but declined 3.6% relative to May of last year.

KAR Global also added more information to its regular chart to show pre-COVID-19 metrics.

Source: KAR Global Analytical Services.

Black Book and Manheim indices for May reflect wholesale stabilization

Both Black Book and Cox Automotive released their monthly wholesale indices for May in recent days, each remarking how some stabilization arrived in the space when compared to the COVID-19 induced turbulence seen in April.

Cox Automotive reported wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 8.96% month-over-month in May; a movement that brought the Manheim Used Vehicle Value Index to 137.0, a 1.9% decrease from a year ago.

Over at Black Book, analysts there said their Used Vehicle Retention Index for May came in at 106.0, marking a 0.7-point dip from April’s reading of 106.7.

Cox Automotive analysts explained Manheim Market Report (MMR) prices improved over the last four weeks, resulting in a 5.1% cumulative increase.

Analysts also noticed MMR Retention — which they explained to be the average difference in price relative to current MMR — was greater than 100% in all but three days in May and averaged 101.7% for the month.

“The MMR Retention trend reflected that vehicles were selling above current MMR values and was a clear reversal of what happened in late March and April,” Cox Automotive said in its report that accompanied the latest Manheim index update.

On a year-over-year basis, Cox Automotive determined each of the major market segments saw seasonally adjusted price declines in May. Minivans led the way with a drop of 8.3%, followed by midsize cars (down 7.4%) and compact cars (6.9%).

Analysts said pickup prices slid 4.1% while prices for SUVs and CUVs mimicked the overall reading at 1.9%. Only luxury vehicles softened less than the overall reading as prices for those units edged down by 0.6%.

Cox Automotive also mentioned pricing for rental-risk vehicles.

Analysts determined the average price for rental risk units sold at auction in May was down 5.3% year-over-year but were up 6.4% compared to April.

Cox Automotive added that the average mileage for rental risk units in May (at 46,300 miles) rose 2% compared to a year ago but declined 10% month-over-month. 

More details about Black Book index

As mentioned previously Black Book reported its May Used Vehicle Retention Index for May registered in at 106.0.

“After a record drop in wholesale prices in April, we saw the markets stabilize in the second part of May,” Black Book senior vice president of data science Alex Yurchenko said in a news release.

“Both the truck/SUV and car segments depreciated in May, but at much lower rate. Due to changing economic conditions and the expected glut of used inventory, we project a drop in values over the summer months,” Yurchenko continued.

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.

The index goes back to January 2005 when Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1% while during 2016, the index fell by just 6.4%.

During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014 when it hit a peak of 128.1.

To obtain a copy of the latest Black Book Wholesale Value Index, go to this website.

Lane watch: Spring seems to be in the air again

Nearly halfway through May and spring might be making a comeback in the auction lanes.

Multiple Black Book representatives made that assessment in the latest Market Insights report that showed a bit of a value rebound when compared to the sharp declines triggered by the coronavirus pandemic.

“Values have continued to trend downward, but the level of bidding activity this past week reminded us of a more traditional spring buying season.” Black Book vice president of automotive valuations Laura Wehunt said in the latest report.

According to volume-weighted data, Black Book indicated overall car segment values softened by 0.41% this past week. Analysts called it a “welcome sight” after three consecutive weeks of greater than 1.30% week-over-week depreciations.

“Spring was in the air for sporty cars as the warming weather drastically slowed the depreciation of this segment down to 0.11%, compared to 0.74% the week prior,” analysts added.

Looking again at volume-weighted information, Black Book determined overall truck segment values (including pickups, SUVs, and vans) decreased by 0.76% last week. As with the car segments, analysts said this reading was a “welcome change” after three weeks in a row of overall weekly depreciations exceeding 1.00%.

Black Book pointed out minivans have been in high supply on the auction lanes and the values are reflecting it with the average weekly change for the last four weeks being a decline of 1.41%.

Turning next to what Black Book sales observers noticed, the anecdotes continued with more references of spring. Here is the rundown:

— From North Carolina: “It had a very Spring market vibe today with the $10,000 and under vehicles being in high demand.”

— From South Carolina: “We finished the day out with our overall sales rate at a little over 70%. We anticipate a lower volume next week due to a lack of repos in A pril.”

— From Georgia: “Cars were definitely in demand at this sale with the majority selling.”

— From Illinois: “We saw an uptick in sales this week with a 91% sale rate at our closed sale.”

— From Florida: “SUVs were in high supply today and sold prices reflected the oversupply.”

Managers slowly move from just auction watchers to bidders & buyers

Perhaps some used-car managers filled a void left with no live sports to watch on television with observing activity during online sales.

The newest Black Book Market Insights report released on Tuesday indicated managers aren’t just watching; they’re starting to bid and buy a bit more, too.

Black Book vice president of automotive valuations Laura Wehunt went so far as to say, “This past week, we finally saw an uptick in sales rates on the lanes. At the start of the pandemic, we saw dealers tuning into digital sales as spectators, but they are starting to actively participate again.”

While participation might be gaining steam, the newest report showed that prices remain soft.

According to Black Book’s volume-weighted data, overall car segment values decreased by 1.32% this past week, which was consistent with the rate of depreciation that analysts spotted during the previous week (1.31%).

“On the lanes, we are seeing the cheaper, rougher condition vehicles garner attention, but the newer, 0- to 2-year-old units continue to struggle as new-car incentives are putting pressure on the used market,” analysts said.

Again based on its volume-weighted information, Black Book reported overall truck segment values (including pickups, SUVs, and vans) dropped by 1.38% last week.

Analysts pointed out full-Size Vans continue to be the spot of strength with another week of the lowest weekly change.

“Earlier in the year, there was an influx of supply on the lanes, but now companies are expecting to hold onto the ones they’ve got as there is an expected shortage later this year due to COVID-19 manufacturing closures,” analysts said.

Continuing on with what Black Book representatives shared about the sales they observed, the anecdotes covered an array of topics connected to the pandemic, including:

— From Florida: “We are still seeing the junk hold up well. We had the largest online bidder presence we’ve had since the crisis has been going on.”

— From North Carolina: “EVs and hybrids are depreciating more right now with the low fuel prices.”

— Another comment from Florida: “There were many cases today where the dealers would step-up to the counter bid.”

— From Pennsylvania: “Bidding was active and constant today with a lot of sales.”

— From Illinois “Buyers didn’t hold back today, even when CRs were going below 3.0.”

 ‘Small improvements’ in wholesale prices; updated short- and long-term outlooks

Wholesale-price analysis and projections from Black Book, Cox Automotive and J.D. Power Valuation Services contained a variety of encouraging assessments about the trajectory of this vehicle metric.

Beginning with the latest update from J.D. Power Valuation Services, analysts there said wholesale auction prices ticked up by a little more than 1% on a weekly comparison for the week ending April 26. Analysts indicated the positive move represented the first one they’ve seen since the middle of March.

Because of the pandemic, the latest wholesale-price reading landed 14% below J.D. Power Valuation Services’ pre-virus forecast for the week.

“While the small improvement can be viewed as a positive indicator of a strengthening market, results still represent a significant discount versus pre-virus levels,” J.D. Power Valuation Services said in the report containing its latest price update.

After several weeks of softness, J.D. Power Valuation Services found that mainstream passenger car prices improved during the reporting period by an average of 2%.

“While mainstream passenger cars experienced small gains, segment prices remain some of the most depressed when comparing the week ending April 26 to pre-virus expectations,” analysts said.

“With that said, mainstream small, compact, and midsize car prices are down by roughly 17%, while SUVs and compact and full-size pickup prices — while still down — performed much better at down by 9% and 14%, respectively,” analysts went on to say.

Over at Cox Automotive, chief economist Jonathan Smoke said in a video presentation that his team’s data shows “wholesale used-vehicle values are starting to stabilize.”

Smoke pointed out the 3-year-old MMR Index declined 2% for the week ending April 25 and is now down 10.2% over the past five weeks. But he also mentioned the MMR Retention Gap narrowed to 2.7%. Cox Automotive calls MMR Retention as average auction transaction prices compared to MMR values

“We have been advising clients to adjust MMR by the retention rate to get an estimate of what it takes to sell in today’s marketplace. Given the improvement in the retention rate, that may be no longer necessary soon,” Smoke said.

Short-term and long-term forecasts

Black Book’s analyst team tackled the challenge of updating short-term and long-term wholesale-price forecasts.

Contained in its update shared last Thursday, Black Book first discussed its forecast based on its most likely economic scenario.

Analysts anticipate an average drop in wholesale prices of 17% during the remaining months of 2020 compared to pre-COVID-19 projections with larger drop occurring during the summer with some recovery in the fall.

To be more specific, Black Book’s short-term price outlook included an 18% drop for SUVs and light trucks and a 15% decline for cars.

Looking ahead to the summer and fall of 2023 with that most likely economic scenario in mind, Black Book said, “The effects of the pandemic will continue to be felt, but we project that values will return to the pre-COVID-19 baseline as used supply will decline because of cuts in retail and fleet sales in 2020 and 2021.”

Turning to its severe recession scenario, Black Book’s wholesale-price forecast is more negative.

Analysts see the potential for a 25% tumble in wholesale prices compared to a pre-COVID-19 baseline this summer and fall with a “very slow” beginning to recovery in 2021.

Specifically, that severe recession scenario has a 26% price plummet for SUVs and light trucks and a 22% price drop for cars.

Black Book closed with its longer-term projections for 36-month residual values under the severe scenario, saying, “The effects of the pandemic and recession will still be felt, and we project a 10% market level decline of wholesale prices as compared to pre-COVID-19 projections.”

TEXTiUM offers no-cost email instant trade values, powered by Black Book

Vehicle pricing and analytics company Black Book is integrating its values into a new product to help dealers digitally connect with consumers.

With the new tool from TEXTiUM called Email Instant Trade Values. agencies can connect any email campaign with the ability to offer each email recipient their vehicle’s Black Book trade value.

The value is delivered instantly by return text.

Black Book says that with TEXTiUM, agencies have been integrating direct mail for dealers over the past two years.

Email Instant Trade Values now accelerates the vehicle sales process.

Black Book says direct mail typically results in long turn times from order to fulfillment. But according to the company, email campaigns are delivered instantly. Dealers can begin to see leads generated as soon as the campaigns are sent.

TEXTiUM is offering Email Instant Trade Values at no charge through May 31. No commitment is required, and those interested can text LEADS to 48498 or visit www.Textium.com.

“We’re proud to be powering this innovative sales tool at such an uncertain time in our industry,” Black Book executive vice president, revenue Jared Kalfus said in a news release.

Kalfus continued, “Dealers can now utilize email marketing to lead customers down the buying funnel by providing a trade valuation for the customer and themselves, while generating a high-quality lead for their business.”

TEXTiUM founder and chief executive officer Craig Schmitz said that many in-market buyers are confined to their homes, and the new technology “bridges the gaps between information, online shopping, and lead generation.”

“Making this tool available at no charge is TEXTiUM’s way of driving revenue for our agency partners and helping dealers sell more vehicles,” Schmitz said. “We’re here to help.”

‘Several months’ before wholesale prices begin to rebound

Experts from Black Book, Cox Automotive, J.D. Power Valuation Services and KAR Global are all using their collective knowledge and skills to assess current wholesale values that have dropped significantly because of the coronavirus pandemic.

These same firms also are tackling the challenge of projecting when wholesale prices might rebound, often using the term “several months” instead of any specific timeframe as stay-at-home orders remain in place throughout many locations.

“When you look at this market, essentially buyers and sellers are in pause mode,” Cox Automotive chief economist Jonathan Smoke said on Tuesday during the company’s quarterly call to examine the Manheim Used Vehicle Value Index among other industry trends.

“You don’t see a lot of evidence of desperation. Instead, you see evidence of buyers looking for opportunities but in essence the spread between the bid and the ask,” Smoke continued. “At the end of the day, only the vehicles that sellers — be they dealers or commercial companies — are prioritizing to move. Those are the only transactions that are happening.”

More details from Manheim

Because change happened so rapidly in March, the latest index reading still looked rosy on a year-over-year comparison.

Cox Automotive reported that wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) decreased 1.10% month-over-month in March. This brought the Manheim Used Vehicle Value Index to 141.9, which still represented a 4.4% increase from a year ago.

After a start of increases in weekly Manheim Market Report (MMR) prices at the end of February, Cox Automotive acknowledged that March saw the full-fledged start of tax refund season, which delivered the biggest weekly price increases since 2014. However, that all began to change as the month progressed.

Analysts determined 3-year-old vehicle values in aggregate were up 1.7% after the first two weeks but began to decline and ended up 1% for the month. The worst-performing model year in March since the downturn began was 2019, according to Cox Automotive.

“It should be noted that, given the unprecedented downturn in sales and market disruption that the industry is experiencing because of the COVID-19 pandemic, the decline we have observed thus far in MMR values at the vehicle level and at all aggregation levels does not fully reflect the declines occurring in the relatively limited number of sales transactions taking place,” Cox Automotive analysts said in the report that accompanied the latest index update.

Turning back to the Tuesday conference call, Smoke reiterated a future projection, assuming that the general economy remains in shutdown mode for the remainder of April before a gradual reopening process begins in May.

“I think there is going to be pressure on prices for at least several months through the middle part of the year and then potentially we start to see that pressure relieve as we get into the end of the year and into next year. That’s following the most likely case to occur,” Smoke said.

“The more negative case where we don’t actually see the pandemic reaching a declining stage, that view is much uglier,” he added.

Insight from KAR Global

Auto Remarketing also connected with KAR Global chief economist Tom Kontos on Tuesday. Kontos shared an array of insights, explaining that he looked back at wholesale data available before and after the 9/11 tragedy to generate some perspective about what’s happening in connection with COVID-19.

Kontos recapped that wholesale prices stayed in a soft pattern for about 20 months in connection with 9/11. However, Kontos pointed out that an additional drag on prices 19 years ago was the volume of off-lease vehicles going down the lanes. Nowadays, Kontos doesn’t see off-lease volume being a price impediment.

“It was about 20 months of a downturn in prices around 9/11,” Kontos said. “Now 9/11 didn't trigger all of that and neither did the recession that occurred about the time 9/11. I had almost forgotten that 9/11 didn’t trigger the recession. There was already a recession happening that started in March 2001. Then it ended in November 2001. So in essence, 9/11 didn't do what this tragic situation is doing, namely putting a shutdown on the entire economy. Back in 9/11, we got back on our feet relatively quickly. It's a testimony to that because that recession ended in November.”

Fast forward to now, Kontos shared pricing data he compiled that compared the figure spotted as of the week of March 16 and compared it to the average seen during the previous six weeks. The comparison generated a decline of 10.6% as the average wholesale price dropped from $17,019 to $15,215.

That price drop came even as KAR Global deployed a multi-channel digital dealer recruitment and engagement campaign that led to record levels of Simulcast bidders and bids.

Again as of March 16, Kontos reported that unique bidders increased 58% over the previous six-week average and bids more than doubled, up 115%. Despite high online participation, dealer demand weakened significantly, with total commercial sales volumes decreasing 39.2% and corresponding drops in conversion (down 24.5%).

And now, perhaps the multi-million-dollar question: When will prices rebound?

“What we’re faced with right now, I’m advising our sellers at auction is you can expect prices to stay way down from where they were pre-pandemic. Unless you want to wait it out another several months, I won’t say 10 or 20, but several months, maybe the rest of this year before we see an uptick in wholesale values,” Kontos said.

View from J.D. Power

It was another rough week for the used-vehicle segment of the automotive industry as sales across all makes and models dropped precipitously throughout the country, according to the most recent COVID-19 Valuation Services Update issued by J.D. Power issued this week.

At the segment level, analysts indicated compact and midsize car prices fell most in the industry (a similar result occurred the week prior). J.D. Power noted large pickup prices held up relatively well, which is likely due to less stringent stay-at-home mandates in high truck demand states (Texas for example).

Premium segment losses were generally less than mainstream declines, according to Jonathan Banks, vice president of vehicle valuations and analytics at J.D. Power Valuation Services.

“It is important to remember that the market dynamics for premium vehicles differ from mainstream makes and models” Banks said. “Premium vehicle demand — and thus price — does not strengthen through a given first quarter like it does for mainstream vehicles. This relative lack of inflation pre-COVID-19 explains why the premium segment appears to have been less affected.”

Projections from Black Book

While sharing updated projections earlier this week, Black Book analysts broke down its wholesale price forecast into two parts, beginning with the impact under their most likely scenario, followed by one considering a severe recession.

In the short-term outlook — the next three to nine months, the components of the forecast of the most likely scenario included:

— An overall 15% drop in wholesale prices for 1- to 6-year-old vehicles compared to the baseline seen before the coronavirus pandemic started.

— An overall 16% decline for SUVs and light trucks and an 11% decrease for cars.

“There is a high probability that older, cheaper vehicles in good condition will not decline as much due to increased demand on those units,” analysts said.

Black Book then delved into its longer-term projections for 36-month residual values under the most likely scenario.

“The effect of the pandemic will be felt, but we project that values will return to the pre-virus baseline as used supply will shrink due to cuts in production in 2020 and 2021,” analysts said.

Black Book then moved on to its wholesale prices impact under a severe recession scenario.

Again, in the short-term outlook — the next three to nine months, the components of the forecast of the severe scenario included:

— An overall 22% drop in wholesale prices for 1- to 6-year-old vehicles compared to the baseline seen before the coronavirus pandemic started.

— An overall 25% decline for SUVs and light trucks and 15% decrease for cars.

KAR Global watches wholesale prices climb in February

KAR Global chief economist Tom Kontos joined the parade of wholesale experts who noticed that February prices moved higher.

“The strong start to 2020 continued in February as average wholesale prices were up again month-over-month and year-over-year.  Both car and truck prices were up,” he said in his latest Kontos Kommentary released on Friday.

According to KAR Global Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, prices in February averaged $11,339, representing a 2.2% rise compared to January and a 5.2% increase year-over-year.

“Average prices for full-size SUVs and crossovers were considerably higher than last February as a higher percentage of younger, low-mileage units were sold,” Kontos said.

Kontos and the KAR Global team also took a deeper look at two specific segments of younger, low-mileage vehicles that often characterize off-lease units — midsize cars and midsize SUV/CUVs — holding constant for sale type, model-year age, mileage and model-class segment.

Prices for those particular midsize cars climbed $854 or 7.1% year-over-year to $12,820. Prices for specific midsize SUV/CUVs rose $664 or 3.1% to $20,120.

Elsewhere in the wholesale market, KAR Global reported average wholesale prices for used vehicles remarketed by manufacturers jumped 2.3% month-over-month and up 7.7% year-over-year.

Analysts determined February prices for fleet/lease consignors softened 1.2% sequentially but increased 5.0% compared to a year earlier.

Finally, KAR Global mentioned average prices for dealer consignors in February moved 3.8% higher versus January and 7.8% relative to February 2019.

Source: KAR Global Analytical Services.

Manheim index hits record high for second straight month

The Manheim Used Vehicle Value Index literally is on a record-breaking start to the year.

Cox Automotive reported wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.35% month-over-month in February. This movement pushed the index up by 6.2% from a year earlier, leaving the index at a new record high of 143.5.

The index reading now has been at or above the 140 mark for seven of the past nine months.

“After a normal and steady trend in weekly Manheim Market Report (MMR) prices in January, February saw prices rise as the month ended,” Cox Automotive said in its update that accompanied the latest index reading.

Analysts made special mention of 3-year-old vehicles, noting that values in aggregate increased 1.1% on a sequential basis in February.

“Both non-luxury and luxury vehicles saw similar gains,” Cox Automotive said. “This February’s performance was notably stronger than last year, as prices relative to the beginning of the year are up 0.9% when they were down 1.9% at this point last year.”

Looking at the wholesale market overall, Cox Automotive indicated all six vehicle categories that analysts track moved higher year-over-year in February.

Luxury cars led the way with a gain of 8.1%, with SUVs/CUVs generating a rise of 5.6%. Midsize car values climbed 4.0% followed by pickups (up 3.0%) and compact cars (up 2.6%). Van values edged up by 0.5%.

Also of note, Cox Automotive pointed out rental-risk pricing increased, too.

Analysts determined the average price for rental risk units sold at auction in February jumped 6.4% year-over-year. Rental risk prices ticked up 0.9% compared to January.

Cox Automotive added that average mileage for rental risk units in February at 52,000 miles represented a 16% spike compared to a year ago and a 1% rise month-over-month.