What follows is the May 2011 Kontos Kommentary on current used vehicle market conditions, presented by Adesa's chief economist Tom Kontos:

Summary

Average wholesale prices softened modestly in May but remained at near-record levels.  This is as expected, considering average used vehicle prices at retail are approaching 60% of average new vehicle prices, and as the spring market gives way to typically milder prices in the summer.

Details

According to ADESA Analytical Services' monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in May averaged $10,460 - down 1.1% compared to April and 0.8% lower than May 2010.  On a year-over-year basis, prices were strongest for compact cars (up 14.7%) and weakest for fullsize SUVs (down 12.9%) and fullsize pickups (down 13.4%), a pattern seen often in 2008, when gasoline prices were last in the $4.00 price range nationally.

Manufacturers registered a 0.9% month-over-month price decrease and a 11.1% year-over-year rise.  Fleet/lease consignors experienced a 1.4% sequential price decrease and a 1.3% annual increase.  Dealer consignors saw a 0.1% average price decrease versus April and a 8.4% uptick versus May 2010.

ADESA Analytical Services estimates that auction industry inventory levels stood at 24 days at month-end compared to 30 days last May, as used vehicle supply remains tight.

Based on data from CNW Marketing/Research, retail used vehicle sales in May were up 2.8% year-over-year for franchised dealers, but down 4.4% for independent dealers.  However, on a month-over-month basis, used vehicle sales were up by about 10% for both groups.  Certified used vehicle sales in May were down 7.2% versus April and down 3.0% compared to May 2010, according to Autodata.

           
Wholesale Used Vehicle Price Trends
           
  Average Prices ($/Unit) Latest Month Versus:
  May-11 Apr-11 May-10 Prior Month Prior Year
           
Total All Vehicles $10,460 $10,576 $10,547 -1.1% -0.8%
     
Total Cars $10,037 $9,989 $9,385 0.5% 6.9%
Compact Car $7,822 $7,758 $6,822 0.8% 14.7%
Midsize Car $8,647 $8,670 $7,798 -0.3% 10.9%
Fullsize Car $6,409 $6,719 $6,267 -4.6% 2.3%
Luxury Car $14,278 $14,344 $14,892 -0.5% -4.1%
Sporty Car $13,845 $13,645 $12,620 1.5% 9.7%
           
Total Trucks $10,917 $11,229 $11,928 -2.8% -8.5%
Mini Van $8,003 $8,329 $8,238 -3.9% -2.9%
Fullsize Van $8,757 $9,404 $9,073 -6.9% -3.5%
Mini SUV $10,817 $11,065 $10,706 -2.2% 1.0%
Midsize SUV $9,918 $10,278 $11,054 -3.5% -10.3%
Fullsize SUV $12,820 $13,333 $14,719 -3.8% -12.9%
Luxury SUV $19,923 $20,176 $21,803 -1.3% -8.6%
Compact Pickup $7,363 $7,473 $7,522 -1.5% -2.1%
Fullsize Pickup $10,691 $11,089 $12,348 -3.6% -13.4%
Source: ADESA Analytical Services. April data revised.

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