Used Vehicle Prices Up 5.4% Year-Over-Year

Wholesale prices in May softened from their April spring-market/tax-season peak — although they remain significantly above year-ago levels, according to the latest Kontos Kommentary from ADESA Chief Economist Tom Kontos.

Retail demand, particularly for “certifiable” units for record CPO sales, helped absorb off-rental volume and growing off-lease supply without significant price declines. However, there was some hesitancy from a few sellers to accept May’s lower prices — this was reflected in low conversion rates for those consignors, says Kontos.

May’s downturn could be a precursor to further softening, especially in areas such as the Northeast, where the growth in off-lease supply is expected to be concentrated, according to Kontos.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in May averaged $10,321 — down 1.5% compared to April and up 5.4% relative to May 2013. Truck prices continue to generally hold firmer than car prices.

Prices for used vehicles remarketed by manufacturers were down 1.4% month-over-month and up 5.0% year-over-year, as more off-rental program units entered the market, many of which were no-sold.

Prices for fleet/lease consignors were down 1.5% sequentially and up 4.2% annually, as more off-rental risk units entered the market (although in many cases these too were no-sold) along with more off-lease vehicles.

For dealer consignors, there was a 2.5% average price decrease versus April and a 3.7% uptick compared to May 2013 — as they wholesaled units obtained in part from trade-ins generated via May’s new vehicle sales.

Based on data from CNW Marketing/Research, retail used vehicle sales in May were up 12.3% month-over-month and 3.9% year-over-year. And based on figures from Autodata, sales of certified pre-owned (CPO) vehicles were a record 207,371 units, up 7.4% versus April and up 10.9% from the prior year.

Wholesale Used Vehicle Price Trends     
  Average Prices ($/Unit)     Latest Month Versus:  
  May-14 Apr-14 May-13 Prior Month Prior Year
           
Total All Vehicles $10,321 $10,481 $9,796 -1.5% 5.4%
Total Cars $9,230 $9,373 $8,934 -1.5% 3.3%
Compact Car $7,266 $7,470 $7,087 -2.7% 2.5%
Midsize Car $8,503 $8,613 $8,192 -1.3% 3.8%
Fullsize Car $7,185 $7,296 $7,240 -1.5% -0.8%
Luxury Car $12,677 $12,563 $12,224 0.9% 3.7%
Sporty Car $13,149 $13,427 $12,849 -2.1% 2.3%
Total Trucks $10,892 $10,918 $9,750 -0.2% 11.7%
Mini Van $7,299 $7,310 $6,558 -0.2% 11.3%
Fullsize Van $11,243 $10,921 $9,872 2.9% 13.9%
Mini SUV $12,991 $13,308 $11,053 -2.4% 17.5%
Midsize SUV $8,390 $8,378 $7,164 0.1% 17.1%
Fullsize SUV $10,896 $10,723 $10,580 1.6% 3.0%
Luxury SUV $19,778 $19,582 $18,673 1.0% 5.9%
Compact Pickup $7,705 $7,777 $7,441 -0.9% 3.6%
Fullsize Pickup $13,305 $13,450 $11,810 -1.1% 12.7%
Total Crossovers $12,821 $13,222 $12,936 -3.0% -0.9%
Compact CUV $11,589 $11,977 $11,352 -3.2% 2.1%
Mid/Fullsize CUV $14,093 $14,478 $14,537 -2.7% -3.1%

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.

Comments

  1. John Maus [ June 15, 2014 @ 10:21AM ]

    On the surface, the article does a good job of describing overall prices, but it doesn't do much in the way of details on the pricing effects of growing lease volumes vs. rental car sales. In other words, are the more desireable lower mileage off lease units holding up prices, or is it across all segments including car rental? For example, could the higher mix of newer off lease returns be causing most of the price increases across the board? This article makes it sound like rental car fleet deprection rates should be leveling off or even decreasing, but maybe that's not the case. I'd like to hear what some of the rental fleet operators have to say.

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