Manheim’s Used Vehicle Value Index hit its highest level ever in January: 124.9.
Used-car values have exceeded 100 on the Manheim Index since the start of 2009, surpassing 120 six times last year.
Strong auction prices have lowered lenders’ loss severity and have enabled lessors to offer vehicles with higher residual values. The key, though, is trying to predict how much longer values will stay so high.
True, new-car purchases are starting to pick up, which should put some pressure on used-car sales. On the flip side, off-lease volume is slated to remain low for the next couple years.
What’s your expectation for used-car values? At what point this year (or next) might auction prices start to decline steadily?
My prediction for the Manheim Index at yearend: 116.2.
Post your guesses below.
Manheim at 118 year end. I do not think we will see a substantial decline for at least 18 months.
So far, not too much. Small residual enhancements from some of the Asian manufacturer’s captives. Nothing like we saw from the domestics prior to 2008. The enhancements I’ve seen from the domestics have been reduced interest rates, so far.
I see a good solid used market remaining through 2012 with the retention values starting a not so robust level in 2013. The why behind this thought is based on used car volumes returning to the market via the increase in lease contracts that started last year and with new cars sales expected to be 15.2-15.5 at least in 2013 a big increase from current trade-in volumes and new car sales of today and the last 2 years.
Ricky, interesting comment. What’s the possible wrench in the used market forecast for 2012, 2013? Higher-than-expected production levels?
The level of trade-ins coming from the new car sales increased levels by 2013 will change the supply level in the market place thus changing from a very limited supply of today that is holding used values strong to a more ample supply in 2013 making it more of a buyers’ market.