Average auction prices in April were up from year-ago levels for the second month in a row. Moreover, prices for vehicles seven model years old or less increased by 6.4 percent over the prior year ($10,963 versus $10,308 – a difference of $655,) according to Tom Kontos at ADESA Corp.
According to its monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, average auction prices in April were up 3.3 percent from year-ago levels, although down modestly (0.8 percent) relative to the previous month. Car prices were up both sequentially and annually, with full-size, sporty, and compact cars making the strongest year-over-year price gains. Truck prices showed solid year-over-year gains for all segments except minivans and compact pickups.
Retail used vehicle prices as a percent of new vehicle prices remain at historical lows. This is continuing to cause shoppers to purchase more used vehicles, as evidenced by year-over-year growth in retail used-vehicle sales since last June. Retail used vehicle sales in April were up 10.5 percent compared to last year according to data from CNW Marketing/Research. The retail sales rebound is especially pronounced for independent used car dealers, whose sales were up 20.1 percent. In short, retail used-vehicle sales are reflecting the traditionally strong spring market spurred in part by attractive prices.
Auction inventories are at very low levels, according to the ADESA Auction Inventory Index, which stands at 95.4 — 35 percent below its year-ago level of 147.8. The low inventory levels are the result of decreased supply and strong demand. These conditions are contributing to the wholesale price firming, according to ADESA.
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