Figures from ADESA Auction, Inc. show that the average used vehicle in March, 2010 was 7 percent higher than the average price in March 2009, and 4 percent higher than it was two months ago. The average price, in dollars, was $10,549.

According to an article in Automotive News, the Manheim Used Vehicle Value also improved in March, increasing 13 percent over March 2009’s index of 106.1, to 119.9, which is also an improvement over February 2010’s index of 118.1.

Manheim’s chief economist, Tom Webb, said that the March prices were higher than he expected. Typically, he explained, every $1,000 in incentives on a new vehicle reduces the price of a used, currend model year version of the same vehicle by roughly $750, but because inventories of new vehicles are fairly low, used vehicle prices are staying high. “To the extent that dealers are not pushing new vehicles at the expense of used, you can keep both prices up,” Webb said on Wednesday, in a conference call with analysts and reporters.

Prices in March, Webb added, were improved by the low supply of recent-model used vehicle, and increased retail demand thanks to larger than usual tax refunds. In addition, there is an improving labor market, and credit availability, which also helped. Webb also said values of used Toyotas did not increase as much as their competitors, but they also didn’t decline, this despite near-record incentive spending by the troubled Japanese automaker.

Overall, sales of new vehicles were improved 24% over March of last year.

Specifically, the index stood at 118.1 in February, 2010, up from 117.6 in January, and 105.5 from February last year.

Tom Webb, Manheim’s chief economist, said that fewer sales of new cars and the trade-ins associated with them have helped contain used-car inventories. At the same time that new car sales have continued to be low, independent auto dealers sold 561,431 used vehicles in February,2010, an increase of nearly nine percent over February, 2009, web added, citing data from CNW Marketing Research.

In addition to independent sales, there were 584,982 used vehicles sold by franchised dealers last month, though this number is roughly three percent lower than it was in February, 2009.

According to Webb, the biggest threat to used-vehicle values in the immediate future is the increase in new-car incentives being offered by various automakers (likely a strategy to counter the incentives Toyota is offering). Such incentives typically reduce used-car values, especially late models.

“A lot depends on how aggressive the incentives get; 0 percent financing — it will depend on how far down the credit scale” automakers are willing to go, Webb told the press. He also said that Toyota’s residual values for recalled models have weakened as compared to the rest of the market, which isn’t surprising considering the publicity attached to the recall, and the sales suspension. He added, however, that Toyota’s prices were underperforming compared with the company’s history, which was due to lease programs in place before the recall, and because of lenders reducing loan amounts to stay withing strict guidebook predictions.

The practical upshot of all this, says web, is that, “We expect part of the recent decline will be reversed.”

The Manheim index began in January 1995 at 100 and is adjusted for model mix, mileage and time of year.