CARMEL, Ind. -

Tom Kontos’ “parity” projections for the wholesale market are coming to fruition.

The KAR Global chief economist explained his thinking in the latest Kontos Kommentary that showed how average wholesale prices surged past $15,000 in May after passing the $14,000 for the first time ever just a month earlier.

According to KAR Global Analytical Services’ monthly analysis of wholesale used-vehicle prices by model class, Kontos indicated wholesale prices in May averaged $15,001. That’s up 3.9% compared to April, 26.5% higher relative to May of last year and 28.6% above the pre-COVID reading registered in May 2019.

“After cracking the $14,000 mark for the first time ever in April, average wholesale used vehicle prices broke $15,000 in May,” Kontos began in his latest wholesale examination that also includes a video that can be viewed here or through the window at the top of this page.

“However, prices appear to have softened mildly from those peaks so far in June, and lower auction conversion rates (vehicles sold as a percent of vehicles offered) further indicate that dealers may have become more selective in their purchase decisions as their used vehicle inventory levels have improved,” he continued.

“Retail used vehicle and CPO sales were strong in May and are up year-to-date versus 2019/pre-pandemic levels, providing strong wholesale demand and good retail gross profit potential for the ongoing tight supply of used vehicles,” Kontos went on to say.

What about that “parity,” Mr. Kontos?

“Trends at the segment level closely follow overall trends, indicating a consistency in demand across all vehicle categories, including the car segments that in years past were underperforming trucks,” Kontos explained.

“This ‘parity; in price performance had been anticipated in pre-pandemic editions of this report as truck supply, especially from strong new-vehicle sales of smaller SUV/crossovers, was expected to catch up with demand while car supply was expected to shrink,” he added.

Kontos also touched on vehicles that are ripe to be certified.

When holding constant for sale type, model-year age, mileage and model class segment — using criteria that characterize off-lease units — Kontos noted prices in May were up by more than 50% on a year-over-year basis versus May of last year and by more than 40% compared to May 2019 for both midsize cars and midsize SUV/CUVs.

Prices for those midsize cars 3 years old and new with less than 45,000 averaged $18,492 in May, while those midsize SUV/CUVs with the same characteristics averaged a high-end steak dinner below $30,000, coming in at $29,926.