ATLANTA -

If you’re a used-car manager scouring the lanes or online channels looking for off-rental units and are having trouble finding any for a reasonable price, evidently you’re not alone.

Manheim’s Tom Webb shared during his quarterly conference call that coincided with the latest update on the Manheim Used Vehicle Value Index that despite a March increase, total new-unit sales into rental declined by 6 percent, or slightly less than 25,000 units, during the first quarter of this year.

At the same time, Webb indicated the number of vehicles operating in rental fleets grew — due to a rise in both seasonal and secular demand. As a result, the number of rental units available at auction declined significantly in the first quarter.

Therefore, Manheim noticed the average auction price for a rental risk unit reached an all-time high in March, soaring above $14,500. Webb thinks the trend reflects that reduced availability as well as strong dealer demand, low new-vehicle inventories and a richer product-offering coming out of rental service.

For reference back in 2008 before the recession hit, Manheim mentioned OEMs sold 150,000 or more units to rental company throughout the first quarter, a level that wasn’t seen until the end of the first quarter of this year, as Webb pointed out. Furthermore in 2008, the average auction price stayed well below $12,500 and the mileage hovered between 25,000 and 30,000.

What Webb described as the “new normal,” rental units in the first quarter of this year had average mileage figures approaching 40,000 with the price at a record level.

“The simple math tells us the number of units coming out of rental service was down sharply,” Webb told conference call attendees Thursday.

“Going forward, the rental car companies certainly are concerned about future supply in terms of their shortages,” Webb continued. “I expect they’re holding onto some units until they can get replacement units. That might increase the length of service even more from what we’ve experienced over the past couple of years.”

Dealers looking into the commercial fleet realm aren’t finding much relief, either.

Manheim spotted record prices for midsize cars coming out of commercial fleets, a level topping $10,000. Manheim’s data shows prices for these units have risen steadily since late last year on an unadjusted, seasonally and mileage adjusted basis.

Veteran dealers probably can remember prices, Webb pointed out, for these vehicles that came in as low as $5,000 in late 2003.

“Prices for midsize fleet cars were exceptionally strong in March, but fleet managers also enjoyed higher pricing in most other segments,” Webb surmised.

“The improved availability of retail credit continues to increase the retail demand for end-of-service fleet units.”

Index Moves Higher Again

Webb revealed March’s Manheim Used Vehicle Value Index reading was 124.2, which represented an increase of 3.6 percent from a year ago. He went on to note wholesale used-vehicle prices (on a mix-, mileage- and seasonally adjusted basis) rose 0.5 percent in March and before the seasonal adjustment, wholesale prices increased by almost 5 percent during the month.

The March reading left the index not far from its all-time high, which was 124.9 set this past January.

“The news of significant employment growth in February and March has, unfortunately, been overshadowed by rising gas prices, political unrest in the Middle East and North Africa, and the earthquake and tsunami in Japan,” Webb explained.

“With the new-vehicle market now anticipating selective inventory shortages in the near term, and with the economic recovery possibly set to show a temporary slowdown, future wholesale prices overall could be volatile, and there certainly will be significant swings for specific models and market classes,” he continued.

While Manheim determined wholesale prices gains for compact and midsize climbed much higher than the overall reading thanks to rising fuel costs, Webb conceded that he “would be hesitant to describe any of the market segments as being weak.”

March price gains by compact cars led the year-over-year comparisons with a spike of 9.9 percent. Midsize cars were not far off that pace at 8.3 percent. Vans managed a price jump, too, at 2.4 percent as did luxury cars at 0.5 percent.

Webb indicated pickups saw their prices soften 1.0 percent year-over-year in March. Lumped together into one category, CUVs and SUVs ticked down by 1.9 percent. Webb was asked whether much of that drop stemmed from SUVs, and he believed that was the case even though he had not examined the specific data to arrive at that conclusion.

“As you can imagine, the full-size SUVs are down tremendously, much sharper than any of the other categories,” Webb offered. “I’m thinking almost double digits off of the top of my head.

“Luxury SUVs aren’t doing well either,” he continued. “But compact SUVs and crossovers actually have performed well.”

Macroeconomic Factors Could Sway Sales

Also as a part of his quarterly discussion, Webb delved into other areas of consumer behavior that could enhance or diminish traffic into dealer showrooms.

“Private-sector employment growth exceeded the quarter-million mark in March for the second consecutive month. That’s a feat last achieved back in March 2006,” Webb pointed out.

“Even with a decline in government jobs, total employment rose by 216,000 in March, which resulted in an average monthly gain of 159,000 during the first quarter. If these employment gains continue (and indications are that they will), it will help offset some the decline in consumer confidence caused by higher gas prices,” he explained.

Webb went on to emphasize that rising pump prices have produced price shifts between market segments and threaten consumer spending.

“Although gasoline prices moved up only modestly in the last half of March, the earlier-than-usual rise has shifted consumer expectations and slowed the rise in discretionary spending,” Webb offered.

“Already, energy, as a percentage of the average household’s total spend, is above 6 percent — a level that in the past has produced changes in consumer behavior,” he declared.

“Given that employment gains in 2011 have, so far, come without any meaningful rise in hourly earnings, another spike in gas prices will likely slow other retail sales activity,” Webb conceded.

Commentary on Japan Disasters

Not to be overlooked, Webb was asked about and touched on what parts and supply disruptions coming out of Japan could do to the overall industry.

“At the beginning of this year, there was a debate as to whether the manufacturers would return to their old ways or whether inventory levels would stay relatively low and they would maintain pricing discipline. I was in the camp that they would maintain pricing discipline and inventory levels. Unfortunately I’m going to be proven right simply because of what’s happened with part shortages,” Webb highlighted.

“I do believe the fundamental restructuring of the automotive industry put them in this position where they no longer have to push inventory onto their dealer network,” he continued.

“In terms of immediate shortages, we certainly do not know how severe they will be,” Webb went on to say. “In selective cases, they’ll prove to be quite a problem. The manufacturers will catch up but that doesn’t always help. Good dealers, good manufacturers, if they have good product, they can work to try to maintain the customers. But customers in the new-vehicle market, sometimes they don’t want to wait. So if another competitor does have inventory, they’re probably going to lose.”