CARMEL, IN - The latest data from the Federal Reserve Board indicates that used vehicles financed in April had an average retail price of more than $19,400, 61.7 percent of the average new vehicle financed that month, according to Tom Kontos, Executive Vice President, Customer Strategies and Analytics, ADESA. This put used-vehicle retail prices above the 60 percent threshold ADESA Analytical Services emphasized for the last couple of months in its commentary as a level that causes many shoppers to opt for a new vehicle rather than a used vehicle. With used-vehicle demand weakening as a result, used-vehicle prices at wholesale could be expected to moderate from their peak in May.

For purchasing dealers, this may be viewed as a welcome respite from general wholesale price escalation seen for approximately the last year and a half, although the flip side is that declining retail demand makes it a bit harder to ultimately sell the vehicles despite their lower acquisition cost. On the selling side of the wholesale market equation, moderating prices are a reminder of the cyclicality inherent in the remarketing industry and a disincentive to holding or no-sale’ing vehicles in the hopes of higher prices later.

Nevertheless, tight supplies of used vehicles can be expected to keep wholesale prices at relatively high levels for both buyers and sellers at auction and online in the months ahead.

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used-vehicle prices in June averaged $10,278 — down 2.6 percent from May and up 1.4 percent versus prior year. Full-size and Luxury SUVs were the only segments that showed month-over-month increases. Mid-size cars and minivans, segments particularly important to fleet remarketers, saw significant price declines in June.

Manufacturers registered a 6.7 percent month-over-month price increase and a 15.1 percent year-over-year rise; fleet/lease consignors experienced a 2.7-percent sequential price decrease and a 3.3-percent annual increase; and dealers saw a 2.4-percent average price decrease versus May and a 5.3-percent uptick versus June 2009.

ADESA Analytical Services estimates that auction industry inventory levels stood at 30 days at month-end compared to 35 days last June — continuing to indicate tight supply and high auction throughput.

Based on data from CNW Marketing/Research, retail used-vehicle sales in June were down 3.1 percent year-over-year for franchised dealers, but up 8.2 percent for independent dealers, leaving total retail volume up 2.4 percent. On a month-over-month basis, retail sales of used vehicles were up for both franchised (up 7.8 percent) and independent (up 9.1 percent) dealers (and up 8.5-percent combined). Certified used-vehicle sales in June were down 7.5 percent versus May and up 3.2 percent compared to June 2009, according to Autodata. The consumer price index for used vehicles rose by 16.2-percent year-over-year in May (latest available) based on data from the Bureau of Labor Statistics.