Used-Vehicle Prices Rise 3.6 Percent

February 20, 2015
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Average wholesale used-vehicle prices rose significantly in January on both a month-over-month and year-over-year basis, according to According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used-vehicle prices in January averaged $10,220 – up 3.6 percent compared to December and up 2.4 percent relative to January 2014.

KONTOS
KONTOS

"One would be quick to conclude that the market seems to be admirably absorbing the highly anticipated growth in supply, and that would be true. Still, it is important to disaggregate averages and indexes in order to look at the underlying impact the supply of off-rental and off-lease vehicles is having on current-to-one-year-old models and three-year-old models, respectively," said Tom Kontos, executive vice president & chief economist for ADESA Analytical Services in his monthly "Kontos Kommentary."

According to Kontos, A somewhat different picture emerges here in that prices for these age segments did indeed take a hit in January, as:
1) Auction “factory” sales were resumed for large inventories of off-rental program units that had been curtailed at year-end 2014.
2) Arowing numbers of vehicles leased approximately 36 months (three years) ago continue to reach maturity and enter online and in-lane remarketing channels.

Strong retail demand, especially for CPO units, as well as moderate incentives, have partially offset these impacts for these age segments and the used vehicle market as a whole.

Much of the month-over-month and year-over-year price variance by model class segment is driven by higher off-rental program vehicle sales this January compared to December and January 2014. (Program vehicles are typically current-model-year or one-year-old models that sell for higher average prices than other auction sales types.) Thus, not a lot should be read into the double-digit increases in average prices seen in some model class segments. However, even after stripping off the impact of higher program vehicle sales, prices for mid-size SUVs and full-size pickups still showed strength.

Prices for used vehicles remarketed by manufacturers were down 10.8 percent month-over-month and down 11.5 percent year-over-year.

"As anticipated in this report last month, the tailwind to prices that might have been provided by the absence of program units due to sale curtailments in December, turned into a headwind as these units are being released in early 2015," Kontos said.

Prices for fleet/lease consignors were up 5.2-percent sequentially and up 1.3-percent annually. This indicates healthy demand for older repo and commercial fleet vehicles, even as off-rental risk and off-lease prices face downward pressure from higher supply.

Dealer consignors registered a 2.2-percent increase versus December and a 3.7-percent increase relative to January 2014, indicating that independent dealers are readily absorbing the excess franchised dealer trades generated from strong new vehicle sales.

Retail used vehicle sales in January were up 1.4-percent year-over-year, based on data from CNW Marketing/Research. CPO sales were particularly strong in January, rising 17.2 percentyear-over-year, according to figures from Autodata.

Wholesale Used-Vehicle Price Trends

 Average Prices ($/Unit)  Latest Month Versus: 
  Jan-15 Dec-14 Jan-14 Prior Month Prior Year
           
Total All Vehicles $10,220 $9,864 $9,983 3.6% 2.4%
           
Total Cars $9,134 $8,620 $8,869 6.0% 3.0%
Compact Car $7,377 $6,654 $7,010 10.9% 5.2%
Midsize Car $8,004 $7,712 $8,258 3.8% -3.1%
Fullsize Car $8,546 $6,075 $6,771 40.7% 26.2%
Luxury Car $12,593 $12,466 $12,209 1.0% 3.1%
Sporty Car $13,050 $12,950 $12,343 0.8% 5.7%
           
Total Trucks $11,015 $10,851 $10,438 1.5% 5.5%
Mini Van $7,663 $7,658 $7,448 0.1% 2.9%
Fullsize Van $11,331 $10,198 $10,341 11.1% 9.6%
Mini SUV $13,002 $12,748 $11,987 2.0% 8.5%
Midsize SUV $8,246 $7,763 $7,503 6.2% 9.9%
Fullsize SUV $10,893 $11,569 $10,981 -5.8% -0.8%
Luxury SUV $18,243 $19,109 $18,941 -4.5% -3.7%
Compact Pickup $7,559 $7,441 $7,362 1.6% 2.7%
Fullsize Pickup $13,550 $13,027 $12,632 4.0% 7.3%
           
Total Crossovers $12,233 $11,931 $12,768 2.5% -4.2%
Compact CUV $10,965 $10,565 $11,553 3.8% -5.1%
Mid/Fullsize CUV $13,157 $12,875 $13,999 2.2% -6.0%
Source: ADESA Analytical Services. December data revised.

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