Manheim index shatters record fueled by February price jump

Not only did soaring wholesale prices push the Manheim Used Vehicle Value Index to a new record, but the February reading also smashed the previous high by 5.5 points.

Cox Automotive reported on Friday that wholesale used-vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 3.79% month-over-month in February. That climb brought the index to 169.2, a 17.9% increase from a year ago, surpassing the previous high of 163.7 posted in August.

Temperatures plunged last month and impacting auction activities as chronicled in this special series from Auto Remarketing. Meanwhile, the Manheim Market Report (MMR) showed values heated up and prices strengthened as the month progressed.

Analysts indicated the 3-year-old MMR Index — which represents the largest model year cohort at auction — ticked up 0.9% during the closing week of the month, leaving prices 2.4% higher through the four weeks of February.

“The increase last week was the strongest increase for that week for any year since 2014,” Cox Automotive said in commentary that accompanied the latest index update.

“Over the month of February, MMR Retention, which is the average difference in price relative to current MMR, averaged 101%. The sales conversion rate also increased for most of the month,” analysts added.

Looking deeper into the February data, Cox Automotive reported prices for pickup soared 33.4% higher year-over-year. That’s more than the next two segment increases combined as prices for luxury cars rose 16.9% and prices for SUVs and CUVs jumped 14.3%.

The other three segments analysts track for the index all increased in February, too, but not as much as the overall rise. According to the update, prices for vans moved 9.1% higher year-over-year while the increase was 7.9% for midsize cars and 4.4% for compact cars.

Also of note on the pricing front, Cox Automotive touched on what happened in the rental-risk space in February.

What has this price escalation done to supply? Cox Automotive addressed that question by citing vAuto data.

Using a rolling seven-day estimate of used retail days’ supply, analysts determined used retail supply peaked at 115 days on April 8. They said normal used retail supply is about 44 days’ supply, and February ended at 34 days.

Cox Automotive also estimated that wholesale supply peaked at 149 days on April 9. Analysts said normal supply is 23 days, which is what it was at the close of February.