The industry began seeing signs of an expected significant increase in off-lease supply as 2014 wrapped up with a modest drop in wholesale prices.

According to ADESA Analytical Services, wholesale prices dropped 0.3 percent from November versus last month to rest at an average of $9,844.

This is still up 2 percent year-over-year, but recent downturns may point to signs of a shifting environment.

ADESA chief economist Tom Kontos said in the latest edition of Kontos Kommentary, the results “reflect the ongoing growth and change in the composition of wholesale supply towards greater ‘institutional’ volume (off-lease, off-rental, off-fleet, repos, etc.) versus dealer consignment volume yielding a ‘richer mix’ that elevates average prices even as supply growth applies downward pressure to those prices.”

But this isn’t the only factor that has contributed to used-price strength, even as supply grows. Kontos pointed out new-vehicle incentives have stayed relatively “benign,” which also has played a role in keeping prices strong on the used side.

Strong used-retail sales, specifically certified vehicles, have also contributed. Furthermore, Kontos said, “supply curtailments and disruptions due to weather and recalls occurred throughout the year; and redistribution of volume into multiple remarketing channels” have also lessened the impact that expanding supply normally has on auction values.

Looking at December wholesale price movement on a segment basis, luxury and sporty cars saw some of the biggest price spikes, which Kontos said could primarily have been due to dealers stocking up on these vehicles in time for the holidays.

Prices for luxury cars rose by 2.3 percent from November and were up 2.9 percent year-over-year, to rest at an average of $12,455 last month.

Sporty cars saw an even bigger spike, with prices rising by 3.1 percent from November. At the end of December, sporty cars were going for an average of $12,955 in the lanes, up 7.3 percent year-over-year.

On the other hand, the full-size car segment saw the largest monthly price decline of all, seeing prices drop by a whopping 20.4 percent. The average rate of $6,060 was also 3.9 percent less than rates seen last year.

Minivans also saw prices slide considerably in December, with rates dropping by 6.2 percent from November.

The full-size vans were up next for declines, with a drop in price of 4.5 percent as the year came to a close.

Manufacturers remarketing these vehicles and more were earning quite a bit more on their auction sales in December. Prices were up 9.6 percent from November.

“Sale curtailments due to recalls were a factor in these December results, and ‘factory’ inventories were relatively high entering 2015,” said Kontos. “Thus, the tailwind to prices that might have been provided by the absence of units due to these sale curtailments could turn into a headwind as these units are released in early 2015.”

Prices for fleet/lease consignors saw a more modest spike in price of 1.3 percent. Kontos pointed out off-rental “risk” units saw stronger price retention with this segment or remarketers, “rewarding rental companies that capitalized on the absence of factory units.”

Lastly, dealer consignors saw a 1.7-percent increase in price and a 3-percent rise year-over-year. Kontos said this shows that the wholesale market is readily taking on an excess of dealer trades coming in from strong new-vehicle sales.

2015 Showing Similar Trends So Far

As 2015 gets underway, prices continue to decline, but still only at a modest level.

According to the most recent “Beggs on the Used Car Market” video report, cars saw prices fall by an average of $30 this past week.

The low decline was fueled by strong retention among the compact cars (whose prices were down $7), full-size cars (down $12), upper mid-size cars (down $17) and entry-level cars (down $20).

“It is obvious with these level of changes that the demand for the cars in this price range found in most of these segments that the spring tax season is taking precedent over cheap gas and more full-efficient cars,” Black Book editorial director Ricky Beggs said in the report.

Even as gas prices fell to an average of $2.21 per gallon last week (down $1.12 year-over-year) trends in the lanes are not reflecting this change.

On the truck side of the market, prices fell by an average of $33 last week, which is better than the $55 decline seen during the same timeframe last year.

And trucks touted a positive price adjustment for the first time in quite a while, Beggs said, with the compact SUVs rising by $10.

The compact pickups saw prices stay consistent with the prior week, while the compact crossovers saw a slight decline of $13.

Interestingly, the full-size utilities took biggest declines, contrary to what would be expected with current gas prices.

Full-size SUVs saw a decline of $92, followed by the full-size crossovers (down $83) and the luxury SUVs (down $55).

To view the latest “Beggs on the Used Car Market” report, see the video above.