Following an 11-week “summer bounce” in Manheim Market Report prices, September ended up being the third consecutive month of record used-vehicle values, according to Cox Automotive's news release and analysis accompanying the latest Manheim Used Vehicle Value Index.
And though weekly prices evened out during the month, analysts are still expecting lofty used-vehicle prices to continue.
That’s driven by lower supply and projections for SUV volume to increase at auction, Cox said.
The Manheim Used Vehicle Value Index was up 3.7 percent year-over-year in September, reaching an all-time high of 139.9.
Compact cars, whose prices were up 7.1 percent year-over-year, and midsize cars (up 4.4 percent) led the way in terms of price growth for September.
Sedans like those have dominated auction volumes this year, with over half of the supply being sedans, according to Cox Automotive. Less than a third have been SUVs (and SUV/CUV prices were up 2.7 percent last month).
But that is likely to change.
“SUV volume, however, is growing, while car volume shrinks following the trend in the new-vehicle market. Especially for consumers seeking an affordable solution to higher vehicle prices and interest rates, sedans have been becoming more attractive,” Cox Automotive analysts indicated.
“However, the supply of sedans in the new-vehicle market is near a six-year low, making them more in demand in the used market.”
Beyond the 3.7 percent overall year-over-year increase in used-car pricing for September, luxury cars were up 0.1 percent, pickups climbed 2.4 percent, SUV/CUVs were up 2.7 percent and vans were up 1.2 percent.
That may be reminiscent of last autumn’s wholesale bump, which came after hurricanes. But the underlying cause is different.
“The strong wholesale prices we saw in the fall of 2017 were driven mostly by major hurricane activity, causing significant vehicle loss in Texas and Florida,” Cox Automotive chief economist Jonathan Smoke said in the analysis.
"This year, the abnormal rise in value seems to be mostly man-made, driven primarily by consumer demand, rising interest rates, and threats of tariffs,” he said. “Consumers and dealers alike had reason to believe the cost of buying a vehicle would be more expensive later in the year, so there was a strong sense of urgency and 'buy now' mentality in both new and used.”
Smoke will be among the array of economists, analysts and other market experts on tap to speak at Used Car Week, which is being held Nov. 12-16 at the Westin Kierland in Scottsdale, Ariz.