Increases in off-lease, retired-rental and repossessed vehicles entering the market are dampening used-vehicles prices, auction company Manheim’s chief economist said, and the trend will continue into 2014.

The spike in used-vehicle prices in November and December 2012 as a result of demand created by Hurricane Sandy will also result in comparisons against year-earlier levels that likely will make used-vehicle prices seem softer for the rest of the year, said the economist, Tom Webb.

Still, Webb predicted that the used-vehicle market will remain favorable for dealers.

“The intense increases in prices that we had when supply shortages were very severe did in fact hurt dealers’ gross margins on retail sales,” he said. Gross margins “rarely grow in this industry, but they stop declining, primarily,” Webb said.

He also said that the increase in off-lease vehicles is viewed favorably by dealers because dealers who take back those vehicles from consumers on behalf of the lessors and then buy the vehicles from the financing company “are going to make a sale one way or the other.”

Meanwhile, prices of used vehicles on average dropped in October from prior-month levels but were higher than they were in October 2012, according to the Manheim Used Vehicle Value Index released last week.

Last month, the index stood at 122.3, the first reading since May to show a decline from the previous month. The index was down from 122.8 in September but higher than the 121.9 reading for October 2012. The index is adjusted for model mix, mileage and time of year.