CARMEL, IN – The firming in wholesale used vehicle prices that began in November continued through March, with average prices rising sequentially for the fifth month in a row, according to Tom Kontos, executive vice-president, Customer Strategies and Analytics for ADESA Auctions.

On a year-over-year basis, prices are still modestly under water, but the level of submersion has diminished to almost negligible levels. Although all seller types, model class segments, and vehicle ages experienced month-over-month price gains, the strength of the overall increase in March was partially determined by robust prices for the youngest, most expensive vehicles purchased in manufacturer auctions by franchised dealers.

This is a reflection both of supply shortages of late-model used vehicles resulting from diminished rental unit sales in recent years, and renewed interest on the part of franchised dealers to generate grosses by selling more late-model used vehicles (at nearly a one-to-one ratio with their new vehicle sales).

Remarketers who have flexibility in the timing of auctioning their vehicles would do well to take advantage of the current seller’s market. Inventory levels at auction have diminished, and the Spring Market is still springing. With consumers, and hence dealers, actively seeking used vehicles in these tough economic times, demand, as well as supply, conditions remain favorable for wholesale prices to continue to firm.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used-vehicle prices in March averaged $9,880 — a 5.5-percent increase over February. Cumulatively, average prices have risen by almost $1,250 since October, though they remain down 1.5 percent year-over-year.

All vehicle model class segments experienced month-over-month increases in average prices, and full-size SUVs and pickups were both up year-over-year. Mid-size and full-size cars also registered year-over-year average price increases.

Year-over-year, March average prices for fleet/lease sales prices were down 3.5 percent. Auction industry sales volumes rose by 18.2 percent compared to February, although volumes were down 7.3 percent compared to year-ago levels. ADESA Analytical Services estimates that generally improving sales prices, conversion rates well above the 60 percent norm, and higher sales volumes combined to lower inventory levels to approximately 44 days at the end of March compared to over 70 days at 2008 year-end and 39 days at the end of March 2008. The working down of inventories will continue to put upward pressure on prices in light of still-strong demand.