On Feb. 9, we outlined a major inflection point for the Manheim Used Vehicle Value Index, a wholesale tracker of used car prices, possibly topping as peak supply chain constraints had passed and more parts would be readily available for automakers to restart and or increase output for new vehicles. At the time, we said this could reverse used car prices. However, we also noted that this inflection point might lead to false positives if supply chain congestion persisted.
More than a month has passed by since we noted the inflection point. And to possibly validate peak supply chain constraints is Goldman Sachs' Jordan Alliger, who told clients Monday that high frequency weekly supply-chain data for the week ending Mar. 14 shows signs of bottleneck relief.
As bottlenecks subside, the Manheim Used Vehicle Value Index declined 3.8% in the first 15 days of March compared to the full month of February. The used car index is still up 24.1% compared to March 2021 at around 222.4. Though momentum and rate of change indicators show soaring used car price trends are drastically slowing as supply chains crunches resolve.
Reported to be at least on a par with OEM engines.