Used vehicle price index rises 1.1% in August

Wholesale prices of used vehicles up to eight years old declined 1.2% in August, according to J.D. Power Valuation Services. Over the past five years, prices have fallen 2.2% on average. Because of this, J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index rose 1.1% to 111.5.

The August increase was the largest rise since May 2016. The index was down 7% in August, from the same month in 2016.

Auction volumes for vehicles up to three years old rose 21.8% to 257,831 units in August, from 211,632 in July. Through the first eight months of the year, auction volumes increased 6% to 1.944 million, from 1.822 million over the same period in 2016. Used cars accounted for 54% of auction volumes, while trucks comprised of 46%, “which is a reversal of what’s occurring on the new vehicle side of the market,” according to J.D. Power Valuation Services.

In September, wholesale prices of vehicles up to eight years old are projected to fall 1.8%. The expected loss “is significantly less than the 3.4% drop” in the same month in 2016. The forecast before Hurricanes Harvey and Irma showed prices would be down 2.8%, but because of the decline in supply and an expected rise in demand, the forecast improved by one point. For the year, prices are expected to fall 6.2%, down from 4.1% in 2016.

New vehicle sales declined 2.1% in August, from the same month in 2016. It was the eight consecutive month sales fell. For the first eight months of the year, sales were down 2.8% to 11.3 million units, from the same period in 2016. The seasonally adjusted annual rate of sales fell to 16.03 million units, from 16.70 million units in July.