Vehicle auctioneer Manheim says data collected from its Australian branches showed strong signs of a recovering used vehicle market began in May and June as COVID-19 restrictions began to lift around the country.
The company says July and August continued to indicate strong demand and strong prices for used vehicles, however volume was impacted by the impact of Victoria’s return to lockdown and continuing economic impacts across the automotive industry.
It says that dealer participation in Manheim’s 100% digital only auctions more than doubled in May and June compared to March and April and stayed at similar levels in July and August.
The volume purchased by dealers was also about double and back to pre-COVID levels. In July and August, auction clearance rates were as high as they had been at any time this year pre-COVID and pricing also continued to recover from the sharp dive in April says Manheim.
Manheim says its auctioneers have reported a much more positive sentiment since May.
The auctioneers say they are seeing dealers pick up on the rising consumer demand and participating strongly in sales to make sure they have the inventory to take advantage of used buyers returning to the market.
“We monitor used vehicle wholesale pricing with our Manheim Used Vehicle Value Index, which tracks relative pricing movement as a whole and also within VFacts segments,” says Cox Automotive Australia and New Zealand marketing and communications director Matt MacAuley.
“Manheim’s Used Vehicle Value Index is a gauge of used vehicle prices in Australia. Benchmarked to prices in January 2006, it demonstrates Month-on-Month and Year-on-Year price changes and seasonality and is based on three-month rolling median prices.
“In August the Index reached its highest peak ever recorded, with an indexed value of 117.5. To give that figure some context, average used vehicle values in Manheim’s public auctions were up 23% in August compared to July.
“Part of the reason of course is constrained supply which results in more competition for the available vehicles, but there are also other factors at play.
“We know the demand for higher priced used cars fell during March, April and May, while more affordable used cars continued to sell.
“As such, inventory levels for cheaper used vehicles have fallen compared to more expensive used vehicles which translates into higher average sale prices. That being said however, both demand for used cars and pricing has never been higher so far this year.
“Manheim believes used car stock will continue to tighten and lack of supply will mean used cars priced will remain strong both at wholesale and retail levels,” MacAuley says.
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