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What Manheim Australia’s Used Vehicle Value Index has taught us about the Australian used car market.

May 25, 2019 Motoring No Comments Email Email

Analysts at Manheim Australia – a leading automotive auction house operating in Australia and New Zealand – have developed an index of used vehicle prices which is exposing clear trends in prices for used cars.http://www.stevecafeandcuisine.com/ Automotive industry stakeholders including fleet managers, product managers and equity research analysts are using the index to inform remarketing strategies and predict the performance of the used car market into the future. In particular, three key lessons have emerged.

1. Used car prices are generally higher in the first half of the year The index has uncovered seasonality in used car prices with prices achieved in the first half of the year generally higher than the second – see heat-map in Figure 1. Prices achieved in April have been above the annual average 12 out of 13 years whilst September has seen below average prices 12 out of 13 years.

2. Prices achieved in the last twelve months have been lower year-on-year Both new car sales and used car prices have been recording negative year-on-year performance since April 2018 – creating opportunities for astute buyers. Manheim believes used car prices and new car sales are suffering from a negative wealth effect brought on by a decline is residential property prices. In response to declining new car sales some OEMs and dealers are offering discounts and more demonstrators which is having a flow-on effect in the used car market.

3. Used car prices fell 17% below the long-run average during the period effected by the global financial crisis One myth floated from time to time is that used car prices increase during a recession. The theory goes that would-be new car buyers settle for a used vehicle or demonstrator – pushing up prices. The reality is, during the last economic shock all asset prices suffered. Used vehicle prices fell 17% below their long run average.

Manheim Market Intelligence

Manheim has an advanced data science capability which it has leveraged to develop a new digital portal customers can use to track the performance of the secondary market for cars and view wholesale price predictions for the most popular new models. The team also provides custom valuations, consulting and advice on matters relating to the used car market

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