ADESA: Used Vehicle Prices Rebound in March

Wholesale prices strengthened in March — above both seasonal and year-ago levels. Off-rental units, which were in greater abundance last March, were a driving factor in this March’s results, according to the latest Kontos Kommentary from ADESA Chief Economist Tom Kontos.

Delayed off-rental supply translated into higher off-rental prices, which contributed to higher overall average wholesale used vehicle prices. On top of that, retail used vehicle sales rebounded strongly in March — after being depressed by severe weather in January and February. The resulting strong demand also contributed to higher overall prices, says Kontos.

To the extent off-rental volume was hindered by winter conditions and a late Easter, this volume should be forthcoming soon. And along with expected off-lease volume growth, it will put downward pressure on prices as seen in previous months, says Kontos.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in March averaged $10,429 — up 6% compared to February and up 4% relative to March 2013. All segments, except minivans, registered month-over-month increases. Pickups and SUVs experienced particularly strong year-over-year price increases.

As manufacturers capitalized on strong demand for certifiable units and lower supply of off-rental program cars, prices for used vehicles remarketed by manufacturers were up 3.9% month-over-month and up 8.2% year-over-year. Prices for fleet/lease consignors were up 8.8% sequentially and up 4.5% annually — in part due to tight supplies and strong demand for off-rental risk units.

For dealer consignors, there was a 7.5% average price increase versus February and a 4.5% uptick versus March 2013. This indicated solid wholesale absorption of high trade-in volume from strong March new vehicle sales.

Based on data from CNW Marketing/Research, retail used vehicle sales were up almost 50% month-over-month, as severe weather conditions eased. And March sales of certified pre-owned (CPO) vehicles were up 15.3% from the prior month and up 8.6% from the prior year, according to figures from Autodata.

Wholesale Used Vehicle Price Trends     
  Average Prices ($/Unit)     Latest Month Versus:  
  Mar-14 Feb-14 Mar-13 Prior Month Prior Year
Total All Vehicles $10,429 $9,839 $10,028 6.0% 4.0%
Total Cars $9,337 $8,776 $9,189 6.4% 1.6%
Compact Car $7,410 $7,130 $7,065 3.9% 4.9%
Midsize Car $8,519 $8,140 $8,520 4.7% 0.0%
Fullsize Car $7,554 $6,889 $7,883 9.7% -4.2%
Luxury Car $12,422 $11,999 $12,057 3.5% 3.0%
Sporty Car $13,247 $12,002 $13,053 10.4% 1.5%
Total Trucks $10,843 $10,239 $9,753 5.9% 11.2%
Mini Van $7,486 $7,609 $6,929 -1.6% 8.0%
Fullsize Van $10,927 $10,907 $9,982 0.2% 9.5%
Mini SUV $12,746 $11,988 $11,227 6.3% 13.5%
Midsize SUV $7,995 $7,324 $6,911 9.2% 15.7%
Fullsize SUV $11,320 $10,652 $10,647 6.3% 6.3%
Luxury SUV $19,788 $18,210 $18,144 8.7% 9.1%
Compact Pickup $7,558 $7,260 $7,550 4.1% 0.1%
Fullsize Pickup $13,274 $12,460 $11,790 6.5% 12.6%
Total Crossovers $13,300 $12,615 $13,572 5.4% -2.0%
Compact CUV $12,200 $11,480 $12,098 6.3% 0.8%
Mid/Fullsize CUV $14,473 $13,791 $15,084 4.9% -4.1%

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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