For the second time this year, used-car prices according to Manheim have hit a record high: 126.6 in April.
On the used-car side, lower wholesale supply and higher retail demand are driving demand. Among new cars, tighter inventory and higher transaction prices are to blame.
Take a look at these facts: Manheim’s Used Vehicle Value Index has exceeded 120 in 10 of the past 13 months. Taken a step further, the Manheim Index has surpassed 100 in all but six months since it was created in January 1995 ― that’s 190 months above par.
While 126% of par is a pretty big increase, maybe we should reset the perspective, much like auto industry analysts talk about a “new normal” for vehicle sales. Just like 17 million units seems to be an artificial high, maybe the used-car values set in January 1995 were an artificial low.
