The following is the March “Kontos Kommentary” from Adesa Analytical Services Executive Vice President Tom Kontos. The views and analysis provided below relate to the vehicle remarketing industry as a whole and may not reflect the views of KAR Auction Services Inc., its management or its subsidiaries.

In contrast to the mild year-over-year softening seen in January and February, wholesale used vehicle prices rose at a greater-than-seasonal pace in March, reflecting continued tight supply and strong retail demand. Average auction prices climbed above $10,000 for the first time since last June and more than matched last year’s March/April spring tax season peak.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in March averaged $10,612 — up 7.5% compared to February and up 0.6% versus March 2011. The impact of high gas prices was more subdued this month after wholesale prices adjusted to rising fuel prices more significantly in February (generally up for cars and down for trucks).

Manufacturers registered a 6.1% month-over-month price increase and an 18.8% year-over-year rise, reflecting continued tight supplies of late-model used vehicles. Fleet/lease consignors experienced a 7.5% sequential price increase and a 3.5% annual increase. Dealer consignors saw a 7.7% average price increase versus February and an 8.5% uptick versus March 2011.

Based on data from CNW Marketing/Research, retail used vehicle sales in March were up 5.4% year-over-year for franchised dealers but down 3.2% for independent dealers, possibly reflecting better used vehicle shopper traffic and sales at franchised dealerships as a complement to fairly strong new vehicle sales during the month. On a month-over-month basis, retail used vehicle sales were up by more than a third for both groups.

Certified used vehicle sales in March were at record levels — up 16.8% versus February and up 7.7% versus prior year — according to Autodata.

The ADESA analysis is based on nearly six million annual sales transactions from more than 170 of the largest U.S. wholesale auto auctions, including those of ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions using the J.D. Power and Associates Vehicle Segmentation Guide to study trends by model class.