Storm-theme wholesale song plays again in September

CARMEL, Ind., and STAMFORD, Conn. - 

An accomplished musician beyond his analytical chops, KAR Auction Services chief economist Tom Kontos has previously seen a storm-themed song play its familiar tune in the wholesale market.

The company’s latest data showed the melody showed up again in September.

According to ADESA Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale used vehicle prices in September averaged $11,046, representing a lift of 0.9 percent compared to August and 2.9 percent relative to September of last year.

“Average wholesale prices in September were up month-over-month and year-over-year, bolstered by dealer demand in the hurricane-stricken regions,” Kontos said. “This impact may be waning and prices are likely to resume the softening pattern seen prior to these catastrophic events.

“In short, Harvey and Irma seem to have resulted in an impact to wholesale prices like that seen in the aftermath of Sandy: A lift of limited duration, geographic scope, and magnitude, but a lift nonetheless,” he continued in his latest Kontos Kommentary that also includes a video available here or via the window at the top of this page.

“Another underlying factor is the stop-sale of manufacturer units involved in recalls, which is keeping some of the supply growth, and the inevitable downward pressure on prices, at bay,” Kontos went on to say. “This, too, should resolve itself with time, resulting in a return to the softening price trend seen previously.”

Though truck segments outperformed car segments, Kontos explained prices moved higher for both groups, unlike in previous months when car prices often softened while truck prices climbed. 

“This could be indicative of greater balance in the supply of both groups of vehicles, whereas previously trucks were in relatively short supply,” Kontos said.

Looking again at a specific wholesale segment that’s become a staple of his monthly updates, Kontos pointed out that fleet and lease sales of two particular kinds of vehicles with 36,000 to 45,000 miles produced price climbs on a year-over-year basis in September.

Prices for midsize cars in this space rose by $304 or 2.7 percent to $11,641 while prices for midsize SUVs and CUVS jumped by $710 or 3.7 percent $19,767.

“Last month, when midsize SUV/CUV prices were down in this table, we suggested that prices might turn up in the aftermath of Harvey and strong truck demand in Texas. This appears to have been the case,” Kontos said.

That Texas truck demand also might have surfaced in the latest data from RVI Group, which saw both is real and nominal Used Vehicle Price Index climb on a sequential basis in September.

RVI Group indicated its September real index reading for full-size trucks climbed 2.7 percent month-over-month and 3.6 percent year-over-year.

Analysts found the RVI Used Vehicle Price Index (Real) increased from August to September by 1.8 percent. However, when compared to September of last year, prices were down by 0.4 percent.

Their Used Vehicle Price Index (Nominal) also moved 1.8 percent higher in September when compared to August. When compared to September of last year the index increased by 1.4 percent.

Turning back to ADESA’s September information, Kontos mentioned average wholesale prices for used vehicles remarketed by manufacturers were down 0.7 percent month-over-month and up 4.1 percent year-over-year. 

Prices for fleet/lease consignors rose 0.2 percent sequentially and 3.6 percent annually.

Average prices for dealer consignors ticked up 0.5 percent versus August and 5.7 percent relative to September of last year.

ADESA Wholesale Used-Vehicle Price Trends

   Average  Price  ($/Unit)  Latest  Month Versus
   September 2017  August 2017  September 2016  Prior Month  Prior Year
           
 Total All Vehicles  $11,046  $10,947  $10,731  0.9%  2.9%
           
 Total Cars  $8,777  $8,732  $8,663  0.5%  1.3%
 Compact Car  $6,682  $6,624  $6,495  0.9%  2.9%
 Midsize Car  $7,785  $7,639  $7,518  1.9%  3.6%
 Full-size Car  $7,243  $7,063  $7,608  2.5%  -4.8%
 Luxury Car  $14,007  $14,003  $13,769  0.0%  1.7%
 Sporty Car  $13,930  $13,903  $13,353  0.2%  4.3%
           
 Total Trucks  $13,182  $13,036  $12,735  1.1%  3.5%
 Minivan  $9,059  $8,777  $8,383  3.2%  8.1%
 Full-size Van  $13,005  $13,009  $13,457  0.0%  -3.4%
 Compact SUV/CUV  $10,673  $10,468  $10,525  2.0%  1.4%
 Midsize SUV/CUV  $11,430  $11,407  $11,655  0.2%  -1.9%
 Full-size SUV/CUV  $13,740  $13,353  $13,255  2.9%  3.7%
 Luxury SUV/CUV  $19,205  $18,947  $18,591  1.4%  3.3%
 Compact Pickup  $9,591  $9,599  $8,608  -0.1%  11.4%
 Full-size Pickup  $16,964  $16,989  $15,878  -0.2%  6.8%

Source: ADESA Analytical Services.

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