CARMEL, IN – Wholesale used-vehicle prices rebounded sharply in October primarily as a result of sharply lower discounts on new vehicles, along with reductions in gas prices, according to Tom Kontos, VP, ADESA Analytical Services, ADESA Inc.
In addition, with soft new-car sales during the month, fewer trade-ins were taken by franchised dealers, possibly requiring more supplementary purchases at auction to support these dealers’ used-vehicle retail sales. These factors caused a pause in the softening pricing environment seen during the summer and early fall, when employee discounts, hurricanes, and high gas prices exacted their toll on the wholesale used-vehicle market, said Kontos.
However, further price firming will require improvement in retail used-vehicle sales, especially by independent dealers. GM’s announcement of a new “Red Tag Event” incentive program will be another limiting factor to further price firming in November, according to Kontos.