As the sticker prices of new vehicles climb ever higher, the conventional wisdom is that the used vehicle market is getting hotter. While this may be true, Manheim’s Wholesale Market Insights report, which was released today, is predicting that used vehicle volume will drop to 39.2 million units by the end of this year (a decline from 39.4 million in 2018) and then drop to 39 million in 2020. In the meantime, used-vehicle prices for June of 2019 were up 4.1 percent compared to the same month last year.
To create the report, Manheim applies analysis to its database of more than five million used vehicle transactions annually. The analysis includes a measurement of used vehicle prices that is independent of underlying shifts in the characteristics of vehicles being sold, according to the company.
“On a year-over-year basis, all major market segments saw seasonally adjusted price gains in June,” according to the report’s authors. “Midsize cars and pickups outperformed the overall market, while most other major segments underperformed the overall market.”
The report does note, however, that June 2018 saw particularly robust sales for used vehicles.
“We estimate the June used SAAR to be 39.8 million, down from 41.1 million last June but up from May’s 39.2 million rate,” wrote the report’s authors. “Last year is a tough comparison for the month as we experienced an abnormal increase in consumer demand during the summer driven by tariff fears and rising interest rates.”
All major analyst and automotive industry groups also reported that the new vehicle market declined in June. June 2019 new vehicle sales were down two percent compared to last year, with one less selling day compared to June 2018. The June SAAR was 17.3 million, a slight improvement on last year’s 17.2 million but down slightly from May’s 17.4 million. The sales of cars continued to decline, as sales in June fell eight percent compared to the same month last year. Light trucks outperformed cars in June, finishing the month up one percent compared to June last year.
