Kontos on how CPO helped retail & wholesale markets in July

Certified pre-owned vehicle sales continue to be a bright spot for franchised dealerships this year, and KAR Auction Services chief economist Tom Kontos explained how those vehicles that become CPO units helped consignors and the wholesale market in July, too.

According to ADESA Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale used vehicle prices in July averaged $11,452, representing a 0.2% softening compared to June but a 5.1% lift relative to July of last year.

Kontos pointed out all vehicle segments showed month-over-month declines in average prices except compact cars, compact pickups and full-size pickups; just some of the segments ripe for CPO.

“Average wholesale prices in July were flat relative to June and remained up on a year-over-year basis largely on the price strength and growing share of truck-segment sales.  CPO sales continue to buoy off-lease vehicle prices,” Kontos said.

Based on data from the National Automobile Dealers Association, he continued in his latest installment of the Kontos Kommentary that July retail used vehicle sales by franchised and independent dealers dipped 2.1% month-over-month and 1.9% year-over-year.

While July CPO sales were down 1.8% from the prior month, Kontos pointed out they rose 6.0% year-over-year, according to figures from Autodata.  On a year-to-date basis, Kontos noted CPO sales are 1.9% higher versus last year.

Besides the previously mentioned trio of vehicle segments that stayed strong in July, Kontos also highlighted significant upward movements by two other specific kinds of vehicles that oftentimes land in dealership CPO inventory. He looked at midsize cars and midsize SUV/CUVs while holding constant for sale type, model-year age, mileage and model class segment — criteria that typically characterize off-lease units.

For those midsize cars, wholesale prices jumped $501 or 4.1% to $12,670. For those midsize SUV/CUVs, wholesale prices moved up even more, rising by $783 or 3.8% to $21,323.

Kontos wrapped up his latest look at the wholesale space by mentioning average wholesale prices in July for used vehicles remarketed by manufacturers rose 2.7% month-over-month and 6.1% year-over-year.

He spotted that July prices for fleet/lease consignors edged up 0.4% sequentially and 4.3% annually. 

Kontos added that average prices in July for dealer consignors slid 1.2% versus June but jumped 4.1% relative to a year earlier.

Source: ADESA Analytical Services.