Adesa: Wholesale Prices Fall $300 in June

Summary

Average wholesale prices fell another $300 in June and are now more than $600 below their April peak for the year.  A higher share of total auction sales made up of lower-dollar dealer consignment units, higher new car incentives and seasonal moderation explain much of the decline.  Tight used vehicle supplies plus strong retail demand should keep used vehicle prices from dropping dramatically going forward despite some downward pressure from Fall de-fleeting of rental and commercial fleet units.

Details

According to ADESA Analytical Services' monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in July averaged $9,956 - down 3.0% compared to June and 1.1% lower than July 2010.  Other than fullsize cars, which are a small-volume segment subject to large fluctuations, average prices were down for all model class segments for the month, with full-size SUVs getting the largest hit.

Manufacturers registered a 2.0% month-over-month price decrease and an 11.3% year-over-year rise.  Fleet/lease consignors experienced a 1.9% sequential price decrease and a 0.8% annual decrease.  Dealer consignors saw a 1.3% average price decrease versus June and an 8.7% uptick versus July 2010.

ADESA Analytical Services estimates that auction industry inventory levels stood at 24 days at month-end compared to 29 days last July, as used vehicle supply remains tight.

Based on data from CNW Marketing/Research, retail used vehicle sales in July were up 17.8% year-over-year for franchised dealers and 10.7% for independent dealers.  On a month-over-month basis, used vehicle sales were up for both groups as well (0.8% for franchised dealers and 3.1% for independents).  Certified used vehicle sales in July were up 1.4% versus June, registering their strongest showing of the year, according to Autodata.  So far this year, certified used vehicle sales are up by about 66,000 units, or 6.9%.  According to Edmunds, average new vehicle incentives climbed by nearly $300 (14%) from their low of $2,089 in May, though they remain about $380 (14%) below last July's level.

Wholesale Used Vehicle Price Trends
           
  Average Prices ($/Unit) Latest Month Versus:
  Jul-11 Jun-11 Jul-10 Prior Month Prior Year
           
Total All Vehicles $9,956 $10,259 $10,061 -3.0% -1.1%
           
Total Cars $9,442 $9,793 $8,872 -3.6% 6.4%
Compact Car $7,377 $7,605 $6,494 -3.0% 13.6%
Midsize Car $7,961 $8,356 $7,287 -4.7% 9.3%
Fullsize Car $6,720 $5,970 $5,386 12.6% 24.8%
Luxury Car $13,879 $14,253 $14,313 -2.6% -3.0%
Sporty Car $13,103 $13,582 $12,252 -3.5% 6.9%
           
Total Trucks $10,509 $10,761 $11,448 -2.3% -8.2%
Mini Van $7,062 $7,405 $7,664 -4.6% -7.9%
Fullsize Van $8,855 $8,869 $8,360 -0.2% 5.9%
Mini SUV $10,386 $10,470 $10,483 -0.8% -0.9%
Midsize SUV $9,426 $9,736 $10,152 -3.2% -7.2%
Fullsize SUV $11,824 $12,614 $14,105 -6.3% -16.2%
Luxury SUV $19,638 $19,820 $21,858 -0.9% -10.2%
Compact Pickup $7,350 $7,376 $7,110 -0.4% 3.4%
Fullsize Pickup $10,822 $10,833 $12,103 -0.1% -10.6%
Source: ADESA Analytical Services. June data revised.

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