Though wholesale prices were on the way up in March, the movement was tempered by expanding used supply.

According to analysis shared by Tom Kontos, executive vice president of ADESA Analytical Services, downward pressure from used supply expansion is manifesting through lower conversion rates and price weakness in particular age, sale type, and model class segments.

According to ADESA Analytical Services data in the latest Kontos Kommentary report, wholesale prices were up 4.7 percent compared to February and up 2 percent year-over-year to end the month with an average price of $10,646.

Fleet/lease consignors enjoyed the biggest bump up from February, with prices rising by 7.4 percent. Manufacturers also felt the impact of tax season highs with prices rising by 4.5 percent. And dealer consignors saw an impressive lift of 6 percent from February.

According to the latest Guidelines report from NADA Used Car Guide, used price strength in March was due in past to the used-vehicle market making up “lost ground” after harsh winter weather put a damper on market activity during the first two months of the year.

According to NADA, prices of used vehicles up to 8 years in age grew by 2.3 percent on a monthly basis in March.

And this marked the highest increase recorded since March of last year when prices rose by over 4 percent during tax season, NADA UCG reported.

Although it looks like prices are holding strong, ADESA’s Kontos explained a “deeper analysis” shows the downward pressure supply growth is putting on rates in the lanes.

“A problem with relying on sales prices for assessing market conditions, even based on the robust data set available through the millions of auction transactions we analyze in this space, is that this data set omits the vehicles that no-sold,” said Kontos. “A large portion of off-rental program vehicles that would have been sold in late-2014 and whose sale was curtailed until early 2015 were no-sale’d in March in hopes of better prices in forthcoming sales. 

“Ignoring this factor leads to a false sense of confidence in the strength of wholesale values.”

Kontos also pointed out average sales prices are being effected by a “richer mix” of institutional vehicles. He pointed out the aforementioned off-rental program vehicles “have had particular impact in elevating average prices.”

NADA analysts said historically, used prices have now risen by an average of nearly 1.5 percent in March over the past 20 years.

That said, pre-recession prices grew by an average of 0.7 percent in March, but by a more significant 2.7 percent in the years since.

“The post-recession increase is not only a function of circumstance (weather disruptions for example), but is also likely due in part to better and more precise dealer inventory management practices,” NADA Used Car Guide's Jonathan Banks said in the report.

Meanwhile, according to ADESA data, the strongest segments this past March were the trucks, including vans, SUVs and pickups, which “performed much stronger than the car and crossover classes,” Kontos said.

Overall, the truck segments saw prices rise by 6 percent last month, while cars saw a 3.6 percent rise and crossovers rose by 4.7 percent.

Some of the most impressive price increases were seen among the SUV segments. For example, the mini-SUV segment saw a 10-percent price spike from February, while the midsize SUVs saw prices rise by 8.1 percent. Full-size pickups continued to perform strongly with a price increase of 4.1 percent.

The truck segment with the weakest retention last month was the compact pickups, but they still saw a 2.6-percent increase from February rates.

For cars, the largest price increased were seen in the luxury car and sporty car segments, which both saw prices rise by 6.4 percent, according to ADESA data. On the other hand, the midsize car segment lagged a bit with a slight 0.9 percent increase when compared to February.

Auction volume was also up in March, perhaps not surprisingly as supply is expected to expand dramatically this year.

According to the Guidelines report, auction volume for models up to 8 years old was roughly 341,000 units in March, up 3 percent from February's level and more than 5 percent higher than March 2014.

Growth was most substantial for 2014 model-year vehicles, “which continues to dominate supply through the lanes,” NADA reported.

Volume for 2014 model-year vehicles reached 70,000 units last month, which is 7 percent higher than in February and up 33 percent from what was recorded for the 2013 model year last March.

As for what’s in store for this month, NADA predicts March’s tax-season peak strength will play a part in limiting depreciation in April to 1 percent, which is strongerthan the 1.5 percent decline averaged for the month over the past 10 years.

“Similar to March, depreciation within mainstream and luxury groupings is expected to be tightly clustered, with losses continuing to be more substantial for premium segments,” Banks said.

Following seasonal patterns, prices are expected to drop approximately 3 percent in May and June, before becoming more moderate in July.