Used van and car prices continue to rise

American used-car salesmen and Japanese auto makers should be a bit happier these days.

Prices of secondhand cars in the U.S. have been rising, thanks to tighter supplies due to fewer sales of new autos, car rental and van rental firms holding on longer to their vehicles, and lower gasoline prices reviving demand for gas guzzlers.

For the auto makers, this means leased cars can be resold for a higher price than they’d have fetched just months ago.

Crucially, it translates into an upsize in book value of these assets, a reversal of last year’s trend of provisioning for losses and writing down the value of leased cars.

In the year through March, Nissan Motor booked $1 billion in residual loss provisions related to leased car assets. At Toyota Motor, provisions for residual losses and souring car loans totaled $800 million.

The unwinding of this has already begun. Nissan wrote back nearly $470 million in reserves in the quarter to June, cutting its losses for the period to $183 million. Toyota says lower reserves were one factor in the August upgrade of its full year operating profit forecast. This will continue.

Manheim Consulting’s wholesale, used-vehicle index rose to an all time high in September, with a near 7% on-year increase — one of the biggest gains in several years. Even better news for the Japanese, Manheim says compacts have outperformed the rest of the market over the past three months.

Bank of America-Merrill Lynch expects Nissan, for example, to write back a further $610 million in provisions in the rest of this fiscal year — which ends in March.

Certainly, the turnaround is still tentative. Consumer sentiment, unemployment and fuel prices could all derail the recovery. Plus, it’s not great news for everyone that rental-car agencies are holding on longer to fleets. Korean automaker Hyundai Motor and the Detroit firms are particularly reliant on fleet sales.

But, for now, news from America’s used-car lots is surely a relief for Japan’s auto makers.