Some bad numbers in February created a mild panic about wholesale values, but result since then show the major drop might have been a fluke.
However, the downward trend remains unstoppable as off-lease volumes pour into the lanes.
The Manheim Used Vehicle Value Index came in essentially flat in March, but chief economist Tom Webb said prices rose in the first 15 days of April.
Other measures that showed that big fall off in February improved in March.
The NADA Used Vehicle’s measure of values dropped 1.4 percent in February, a month prices usually improve.
However, the NADA Index rose 1.6 percent in March.
David von Paris, senior automotive analyst for J.D. Power Valuation Services said that “wasn’t quite as big as originally anticipated.” However, “it was directionally right in line with the period’s 2.3 percent average over the previous three years.”
Tax refunds drove these swings.
Paris said the number of tax refunds issued improved significantly in March. However per the IRS, the total number issued through March 24 was still 3.4 percent lower than during the same period in 2016. While the total number of refunds was still down for the year, the amount issued improved by 7.6 percentage points compared to what was reported through February 24.
Anil Goyal, senior vice president at Black Book, said the delay in refunds was made worse because many creditors were tightening at the same time.
Tom Kontos, chief economist for KAR Auction Services Inc., also saw prices in March.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in March averaged $10,904, up 2 percent compared to February and up 1 percent relative to March 2016. All but one model class segment (compact pickups) showed month-over-month increases.
However, Kontos said the downward pressure remains too strong to keep prices from declining.
“It’s best to brace for more softening,” he said.
Still, the industry has held up fairly well, Webb said.
“Although used vehicle values have declined in five of the last six months, it has not been the collapse that many analysts have warned of for more than a year due to increasing wholesale supplies,” he said.