Average wholesale used vehicle prices were up on both a month-over-month and year-over-year basis in March, according to the latest Kontos Kommentary from ADESA Chief Economist Tom Kontos.

Though this is indicative of both seasonal and secular market strength, supply growth is exerting downward pressure on prices as witnessed by lower conversion rates and price weakness in particular age, sale type and model class segments, according to Kontos.

A problem with relying on sales prices for assessing market conditions is this data set omits the vehicles that no-sold. A large portion of off-rental program vehicles — that would have been sold in late-2014 and whose sale was curtailed until early 2015 — were not sold in March in hopes of better prices in forthcoming sales. Ignoring this factor leads to a false sense of confidence in the strength of wholesale values, according to Kontos.

Another factor that should be considered is that average sales prices continue to be biased upward by a “richer mix” of institutional vehicles this year compared to last year, says Kontos.

In short, average wholesale prices are holding up well, but a deeper analysis indicates that supply growth is putting downward pressure on prices as one would expect.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in March averaged $10,646 — up 4.7% compared to February and up 2% relative to March 2014. The truck classes, including vans, SUVs and pickups, performed much stronger than the car and crossover classes.

Prices for used vehicles remarketed by manufacturers were up 4.5% month-over-month but down 8.3% year-over-year, according to ADESA.

Prices for fleet/lease consignors were up 7.4% sequentially but down 0.6% annually. Dealer consignors registered a 6% increase versus February and a 1.7% increase relative to March 2014, says ADESA.

CPO sales were again strong, rising 12.4% month-over-month and 7.4% year-over-year, according to figures from Autodata.

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.