ADESA: Wholesale Used Prices Drop 0.9% in December

After a one-month hiatus, wholesale used vehicle prices resumed their softening in December, as average prices declined on both a month-over-month and year-over-year basis. The softening price trend was evident throughout much of 2013 — with some reversals at the beginning of the year due to lingering supply shortages from Superstorm Sandy and later in the year due to strong retail used vehicle demand, according to the latest Kontos Kommentary from ADESA Chief Economist Tom Kontos.

As stated in past reports, the overriding dynamic in today’s used vehicle market is rebounding supply, which is putting downward pressure on wholesale prices. However, strong retail demand is restricting this downside, as is the gradual nature of the supply increase itself. Still, average wholesale prices fell nearly 2% as volumes grew by an estimated 5% in 2013. Growth in retail used vehicle sales of over 3% reduced the impact, says Kontos.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in December averaged $9,661 — down 0.9% compared to November and down 1.3% relative to December 2012. Luxury cars, SUVs and sports cars were the only segments that showed monthly upticks.

Prices for used vehicles — remarketed by manufacturers — were up 3.4% month-over-month and up 3.3% year-over-year, primarily due to tight supplies for this portion of the market (largely late-model off-rental program units), says ADESA. Prices for fleet/lease consignors were down 0.3% sequentially, although up 1% annually. For dealer consignors, there was a 1.5% average price increase versus November 2013 but a 2.6% downturn versus December 2012.

Based on data from CNW Marketing/Research, retail used vehicle sales were up 4.8% month-over-month and up 7.5% on a year-over year basis in December. This allowed total retail sales (i.e., sales by franchised and independent dealers) to reach close to 30 million units and total used vehicle sales (including private sales) to reach nearly 42 million units in 2013 — increases of 3.4% and 3.6%, respectively.

And based on figures from Autodata, sales of certified pre-owned (CPO) vehicles in December were down 3% from the prior month but up 9.4% from the prior year. Total certified pre-owned (CPO) sales exceeded 2 million units for the first time in 2013 and were up 15.1% from 2012.

Wholesale Used Vehicle Price Trends     
  Average Prices ($/Unit)     Latest Month Versus:  
  Dec-13 Nov-13 Dec-12 Prior Month Prior Year
           
Total All Vehicles $9,661 $9,750 $9,787 -0.9% -1.3%
Total Cars $8,506 $8,531 $8,867 -0.3% -4.1%
Compact Car $6,534 $6,675 $6,943 -2.1% -5.9%
Midsize Car $7,786 $7,950 $7,978 -2.1% -2.4%
Fullsize Car $6,311 $6,555 $7,645 -3.7% -17.4%
Luxury Car $12,114 $11,973 $12,458 1.2% -2.8%
Sporty Car $12,087 $12,002 $12,365 0.7% -2.2%
Total Trucks $10,127 $10,198 $9,817 -0.7% 3.2%
Mini Van $7,461 $7,740 $6,853 -3.6% 8.9%
Fullsize Van $9,400 $9,669 $8,943 -2.8% 5.1%
Mini SUV $11,337 $11,471 $10,755 -1.2% 5.4%
Midsize SUV $6,823 $7,039 $6,733 -3.1% 1.3%
Fullsize SUV $11,183 $11,194 $11,501 -0.1% -2.8%
Luxury SUV $19,351 $19,130 $19,223 1.2% 0.7%
Compact Pickup $7,040 $7,223 $7,221 -2.5% -2.5%
Fullsize Pickup $12,081 $12,231 $11,652 -1.2% 3.7%
Total Crossovers $12,462 $12,760 $13,084 -2.3% -4.8%
Compact CUV $11,073 $11,143 $11,381 -0.6% -2.7%
Mid/Fullsize CUV $13,819 $14,344 $14,674 -3.7% -5.8%

This Kontos Kommentary analysis is based on nearly six million annual sales transactions from more than 150 of the largest U.S. wholesale auto auctions, including those of ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle model class.

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