Robust sales of used vehicles helped to push up prices in June, according to an industry update.
Analysts note the used vehicle market turned a positive corner with an increase in the Seasonally Adjusted Used Vehicle Price by 1.2 points—compared with May—to reach 118.2. June’s above-average performance brought the index 4.1 points above June 2017.
J.D. Power’s July 2018 Used Car and Light Truck Guidelines Industry Update found that while used vehicle prices rose, wholesale prices for new cars declined by an average of 0.9%. New vehicle sales volume in June posted a gain of 5.4% over May likely spurred by increased incentives which have grown for 39 months straight. Even once seasonality factors are removed, new vehicles hit an anualized sales rate of 17.3.
“In terms of full-year expectations, with exceptionally strong performances observed over the past few months, our forecast is improvement for the second month in a row,” said David Paris, Executive Analyst at J.D. Power Valuation Services. “We expect used prices to increase, especially as negative forecast factors hurting used vehicles such as increase in used supply, worsening credit conditions and increase gasoline prices continue to be incentives.”