ATLANTA — Wholesale used-vehicle prices increased again in May, suggesting dealers have continued to achieve efficiency gains that allow them to bid-up auction prices even as gross margins narrow.

The May increase, which followed an April increase, resulted in a year-over-year gain, according to Manheim’s Used Vehicle Value Index.

Total used retail unit volumes rose 6% in the first four months of 2016. Preliminary numbers suggest sales rose again in May. Likewise, CPO sales jumped 6% in the first four months of the year, increasing again in May.

"Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased in May, resulting in a Manheim Index reading of 124.5," Manheim stated in its report, in part. "The large monthly rise, combined with weakness this time last year, resulted in a year-over-year gain — the first since December of last year.

New vehicle sales: New car and light-duty trucks sold at a seasonally adjusted annual selling rate (SAAR) of 17.4 million in May. The number was an improvement over April’s 17.3 million pace, but below last May’s 17.6 million.

For the first five months of 2016, the SAAR averaged a modest 17.2 million, despite heavier fleet sales. In the first five months, new-vehicle purchases increased 8% for rental car companies, 11% for commercial fleets, and 38% for government agencies.

"At the start of the year, there were indications that manufacturers were going to accept the leveling-off of sales at last year's record pace, but announced incentives for June picked it up," Manheim stated in its report. "Overall, new-vehicle inventory levels are reasonable, but the mix is imbalanced. On net, we expected the new-vehicle market will have a slightly negative impact on used-vehicle residuals in the coming months."

Unadjusted prices: A straight average of auction prices remained well above year-ago levels in May due to the share shift toward commercial consignment and lower average mileage for both dealer and commercial consignment.