Make it five weeks in a row of wholesale values moving higher fueled by the 2019 spring market.
According to this week’s Market Insights report from Black Book, editors noticed several car segments continued to show strong week-to-week retention, especially vehicles that might turn with buyers looking to stay within a budget.
“Broad strength in the used-vehicle market continues. Last week marked the fifth consecutive week for positive adjustments to values,” Black Book executive vice president of operations Anil Goyal said in the latest report.
Based on volume-weighted data, Black Book indicated overall car segment values increased by 0.24% last week. That figure is on par with the two-week average, which was 0.27%.
Editors noticed values of compact cars increased the most, rising by 0.66%.
Again stemming from volume-weighted information, Black Book determined overall truck segment values (including pickups, SUVs, and vans) increased by 0.16% last week. That level is nearly double the two-week average of 0.09%.
In truck space, editors mentioned sub-compact crossovers and compact vans generated the highest increases, climbing by 0.49% and 0.36%, respectively.
Turning next to what Black Book’s lane observers spotted at nearly 60 sales nationwide, the anecdotes reflected a busy spring market. Here is the rundown:
— From Florida: “The vehicles with low CRs struggled more than usual. On the other hand, trucks in good condition brought really good money.”
— From New Jersey: “One of the lanes I watched had 96 vehicles consigned and sold 58. Of the 38 no-sales, 15 were cars and 23 were SUVs. Overall, cars seemed to draw more interest and command more money.”
— From Washington: “There was a nice variety of good, clean units, but overall, the consignment was down.”
— From Pennsylvania: “Not as many buyers as last week, which resulted in an average sale.”
— From Michigan: “Consignment was lower and prices were higher. Dealers are scrambling to acquire more vehicles.”
DAA Northwest and KCI Kansas City say their signature events are known for their increased consignment volumes and buyer attendance.
But those dealers in attendance at DAA Northwest’s Rock & Roll Sale in July and at KCI Kansas City’s Guitars & Cars event in August will also hear music from some celebrated performers.
DAA Northwest's Rock & Roll Sale on July 24 and 25 will feature former Doobie Brothers front man and Steely Dan collaborator, Michael McDonald. Old Dominion will perform at KCI Kansas City’s Guitars & Cars event on Aug. 14 and 15. Old Dominion recently won its second consecutive “Group of the Year” award at the 54th ACM Awards ceremony.
In other auction news, Houston Auto Auction is moving to a new, state-of-the-art, 24-acre facility. The company said a previous auction company built Houston Auto Auction’s new home from the ground up three years ago. The facility includes four auction lanes, a four-bay mechanical shop and completely upgraded recon facility. The new facility will feature Simulcast selling in every lane.
Regarding the DAA Northwest and KCI Kansas City events, five-time Grammy Award winner McDonald, who is known for his distinctive, soulful vocal style, will appear on the DAA stage. At the event, he will perform his hits such as “I Keep Forgettin,” “Minute by Minute” and “What a Fool Believes.”
McConkey Auction Group president and chief executive officer Bob McConkey said in a news release that attendees of the DAA Northwest and KCI Kansas City events should “get ready for more fun than you’ve ever had at work!" DAA Northwest and KCI Kansas City, along with DAA Seattle, are part of the McConkey Auction Group.
The auctions feature dealer-only and public auto auctions, MotorSports, RV and heavy equipment sales. All three locations are independently owned and operated members of ServNet and are powered by Auction Edge.
Regarding the Houston Auto Auction news, the inaugural sale will take place on April 23 at the new facility, which is located at 2000 Cavalcade Street in Houston. A heavy trucks and equipment sale will take place at 12:30 p.m., fleet/lease and dealer vehicles at 1:30, and damaged/disabled units at the end of the sale.
Houston Auto Auction’s official grand opening will take place May 7 in conjunction with the auction's Anniversary Sale.
James Bowers founded Houston Auto Auction in 1964. Brothers Tim Bowers, James "Chip" Bowers, II and Mark Bowers are the current second-generation owner/operators. The auction sells vehicles, large commercial trucks and heavy equipment for corporations, leasing companies, banks, credit unions, municipalities and other government agencies.
Consignments from ARI, Element, Fleet/Lease Disposal, Fleet Street Remarketing, Flexco, Leasing Associates, Merchant's Fleet, Security First Credit Union and several regional financial institutions and municipalities are featured at the auction's weekly sale. A monthly GSA sale also takes place.
Auction president and chief executive officer Tim Bowers said in a news release that his company's move to the new facility takes place “at a pivotal point in our auction's history” as the auction celebrates 55 years in business.
Dealers don’t have to meander through the lanes or go on their smart devices for significant spans to know the spring market is in full bloom.
How long it might last is the question Black Book looked to answer in its newest Market Insights report.
Editors indicated spring activity continued to roll on this past week, with four specific car segments and three truck segments generating the most price activity.
However, Black Book executive vice president of operations Anil Goyal doesn’t suspect that lane intensity will continue too much longer.
“The spring market continued to show strength last week. However, it’s not expected to last long as sales percentages are starting to come down from their peak,” Goyal said in the latest report.
An auction owner from South Carolina who talked with Black Book went so far as to make this assessment: “It feels like the robust spring market is beginning to fade. Our sales percentages are beginning to come down to levels that are typical during the summer months.”
According to volume-weighted information, Black Book determined that overall car segment values increased by 0.29% last week. That’s more than triple the average increase spotted during the previous four weeks; a reading at just 0.09%.
Among those cars, editors noticed full-size cars increased the most, rising by 0.76%. But sporty cars, subcompacts and compact cars weren’t far off that pace as each segment jumped by at least 0.53 percent.
Again, based on volume-weighted data, Black Book indicated overall truck segment values (including pickups, SUVs, and vans) ticked up by 0.19% last week. That level is slightly higher than the four-week average rise, which was 0.16%
In the truck space, minivans, midsize crossover/SUVs and small pickups generated the highest increases, climbing by 0.59%, 0.55% and 0.54%, respectively.
Furthermore, Black Book’s lane observers stationed at nearly 60 weekly sales nationwide collected anecdotes that further showed how the 2019 spring market is unfolding.
Here is the rundown from the other sale locations Black Book reported:
— From Georgia: “The spring market is still going strong. There was a good crowd with competitive bidding and very few no-sales. The only vehicles that seemed a little soft were the luxury vehicles.”
— From Pennsylvania: “This is a very hot market. Of all the lanes here, the truck lanes were the most active with most selling and for good prices.”
— From Michigan: “The market is up as dealers remain positive, although we are hearing reports of low trade-in volume.”
ADESA said Tuesday morning it has launched ADESA Simulcast, which will replace its ADESA LiveBlock platform.
ADESA Simulcast, which is powered by Auction Frontier’s cloud-based auction simulcast solution Velocicast, is rolling out on ADESA.com, ADESA.ca and the auction company’s mobile app.
The ADESA Sacramento and ADESA East Tennessee auction locations have already transitioned from ADESA LiveBlock to ADESA Simulcast, with the rest of the company’s U.S. and Canadian auctions set to transition by the end of June.
“At ADESA, we are investing in a more seamless, efficient customer experience by accelerating the modernization of our simulcast marketplace and ADESA.com,” ADESA president John Hammer said in a news release.
“Our customers want more functionality and more intuitive features when participating in our online auctions,” Hammer said. “Working with Auction Frontier is not only helping us improve our customers’ online experience, but also that of customers in-lane, with enhanced displays showing condition reports and bidding activity of all lanes throughout the sale. This initiative is also providing other process efficiencies and helping enable our new VirtuaLane and multi-site sales.”
As Hammer shared, the changes go beyond a new name. In a phone interview, Hammer said customers may recognize the Velocicast product from other auctions that use it, which can make the transition a bit easier.
As far as changes they might notice, Hammer, said, “the first thing that comes to mind is that there’s an unlimited number of lanes that they can watch at the same time. So, as they’re trying to bid in multiple locations, it will be easier for them to do that. There was a restriction on the number before — just the capacity we had in our own system.”
Hammer also said the new ADESA Simulcast has greater “interactivity” between buyers and the actual lane.
For instance, there is a live chat feature.
“As a buyer has questions, they can chat with either the auctioneer or the block clerk as they’re working through the auctions,” he said. “So, a little better information, a little better look and feel as well as some tactical things like that — being able to connect with the auctioneers.”
Another interactivity feature is from the auction block side, as Hammer said the auctioneers and clerks have “much more useable” features, as well.
For example, the technology allows for the auctioneer to tell when the buyer has the mouse positioned over the bid button.
“As the auctioneer’s calling out the auctions, in the lanes they can see people that are working their bid, they can read body language,” Hammer said. “A little harder to do online. But if they see somebody hovering over the bid button, they can actually say, ‘Hey Joe, I see you hovering; click it one more time, you want this car.’ Engaging with the buyer.”
Asked what prompted the decision to transition to ADESA Simulcast, Hammer said: “Just a continuous upgrade of the user experience. And we could either continue to build it on our own or we could leverage something that we could see and knew our customers would really like.”
He also mentioned the various applications that ADESA has, like ADESA Marketplace and ADESA.com. Previously, buyers had to switch back and forth between those. LiveBlock was in a different app itself.
With the transition to ADESA Simulcast, everything is integrated and in one place, Hammer said.
LiveBlock Auctions International, a business unit of ADESA parent company KAR Auction Services, had provided the simulcast platform for ADESA.com.
The technology behind the ADESA Simulcast platform is powered by Roseville, Calif.-based Auction Frontier. Scott Suchomel is the company’s president.
“At Auction Frontier, we have made a real effort to understand this industry and the evolving needs of consignors, auctions and buyers and how they interact,” Suchomel said in a news release. “Making the customer’s business priorities core to our technology offerings helped us to quickly become the leading auction simulcast provider.
“Our partnership with ADESA is going to extend and accelerate our innovation in the simulcast space. With this partnership, we have totally revamped the in-lane experience for on-site buyers,” he said. “The next few years will be exciting while we continue to partner with ADESA to push the boundaries of the online buying experience.”
As KAR Auction Services chief economist Tom Kontos explained it, those crossovers and SUVs that rolled over the curb during the past couple of years as leased units are now “coming home to roost.”
According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, Kontos and the analyst team determined wholesale used-vehicle prices in March averaged $11,095 — up 3.0% compared to February and up 2.5% relative to March of last year.
Kontos pointed out that all vehicle segments experienced month-over-month increases with car prices going up more than truck prices, on average.
“Average wholesale prices and retail used vehicle sales were strong in March, typifying the usual spring/tax season market uptick,” he said in his latest Kontos Kommentary released on Monday.
“In addition, our analysis increasingly indicates that prices for car segments are beginning to hold up better, while crossover and SUV truck segments may be starting to have a tougher go. In recent years, the opposite has been true,” Kontos continued.
“As mentioned in previous commentaries, this is to be expected as more crossovers and SUVs start coming home to roost from strong new-vehicle sales over the last few years,” he added along with a video that can be seen here..
Kontos again took a closer look at fleet and lease trends for vehicles less than 3 years old and 45,000 miles on the odometer. When holding constant for sale type, model-year age, mileage and model class segment — using criteria that characterize off-lease units — Kontos noticed that prices climbed “significantly” on a year-over-year basis for midsize cars but dropped “substantially” for midsize SUV/CUVs.
Specifically, those car prices jumped $530 or 4.4% to $12,517 while those utility prices slid $688 or 3.3% to $20,336.
Kontos went on to mention all seller types saw monthly and annual average price increases in March.
The update showed that average wholesale prices for used vehicles remarketed by manufacturers increased 3.7% month-over-month and edged 0.1% percent higher year-over-year.
Prices for fleet/lease consignors rose 4.3% sequentially and 2.3% annually, according to ADESA data.
Finally, Kontos noted average prices for dealer consignors increased 5.7% versus February and 2.0% relative to last March.
ADESA Wholesale Used-Vehicle Price Trends
| |
Average |
Price |
($/Unit) |
Latest |
Month Versus |
| |
March 2019 |
February 2019 |
March 2018 |
Prior Month |
Prior Year |
| |
|
|
|
|
|
| Total All Vehicles |
$11,095 |
$10,775 |
$10,824 |
3.0% |
2.5% |
| |
|
|
|
|
|
| Total Cars |
$8,656 |
$8,339 |
$8,595 |
3.8% |
0.7% |
| Compact Car |
$6,716 |
$6,484 |
$6,661 |
3.6% |
1.6% |
| Midsize Car |
$7,564 |
$7,352 |
$7,591 |
2.9% |
-0.4% |
| Full-size Car |
$7,996 |
$7,780 |
$7,274 |
2.8% |
9.9% |
| Luxury Car |
$13,144 |
$12,633 |
$13,088 |
4.0% |
0.4% |
| Sporty Car |
$14,340 |
$13,412 |
$14,194 |
6.9% |
1.0% |
| |
|
|
|
|
|
| Total Trucks |
$13,145 |
$12,820 |
$12,779 |
2.5% |
2.9% |
| Minivan |
$8,408 |
$8,367 |
$9,876 |
0.5% |
-14.9% |
| Full-size Van |
$13,283 |
$12,287 |
$13,195 |
8.1% |
0.7% |
| Compact SUV/CUV |
$11,322 |
$11,095 |
$10,777 |
2.0% |
5.1% |
| Midsize SUV/CUV |
$11,371 |
$11,234 |
$11,031 |
1.2% |
3.1% |
| Full-size SUV/CUV |
$14,214 |
$13,628 |
$13,379 |
4.3% |
6.2% |
| Luxury SUV/CUV |
$18,281 |
$17,788 |
$18,290 |
2.8% |
0.0% |
| Compact Pickup |
$10,082 |
$9,692 |
$8,905 |
4.0% |
13.2% |
| Full-size Pickup |
$16,244 |
$15,662 |
$15,707 |
3.7% |
3.4% |
Source: ADESA Analytical Services.
Depending on where your dealership is situated, if the greening grass and volume of pollen in your neighborhood already haven’t indicated spring is in full swing, perhaps the buzzing at your favorite wholesale auction should show it.
This week’s Market Insights report from Black Book summarized the continued intensification of the spring market with lane watchers throughout the country relaying anecdotes about active bidding and more.
“The spring market trend continues with affordable used sedans rising the most in values. The crossovers are showing an uptrend as well, but not as strong as the sedans,” Black Book executive vice president, operations Anil Goyal said in the latest report.
According to volume-weighted data, editors determined overall car segment values increased by 0.25% last week. That’s quite a reversal of the four-week average, which represented a 0.10% dip.
Black Book pointed out subcompact cars increased the most with their values rising by 0.74%
Again based on volume-weighted information, editors indicated overall truck segment values (including pickups, SUVs, and vans) decreased by only 0.01% last week. Like cars, that latest reading is quite different than the four-week truck average, which was a decline of 0.28%
Values for compact vans led the way with an increase of 0.90%.
As mentioned, Black Book’s representatives at nearly 60 sales nationwide noticed auctioneers and ringmen stayed busy, watching for bids from dealers walking the lanes or submitting offers online. Here is the rundown:
— From Georgia: “Both inventory and attendance were up in numbers. The quality of the consigned inventory was subpar, but most sold anyway.”
— From California: “A strong sale with lots of action. More vehicles were purchased online as opposed to in the lanes.”
— From Pennsylvania: “A high percentage of vehicles sold as dealers were stepping up their bids. I heard some complaints from dealers about having to pay higher than normal prices to secure inventory.”
— From Wisconsin: “Almost everything is selling amid very active bidding. Prices are moving up on most models.”
While edging lower on a sequential basis, Black Book’s Used Vehicle Retention Index for March came in higher than a year ago, reflecting how the ongoing spring market has behaved.
On Tuesday, Black Book released its index for March, and the reading stood at 113.8, representing a 0.6% dip from February when it was 114.5. Editors pointed out the index is 1.7% higher than where it was a year ago when the reading sat at 112.0.
Black Book explained the index has reflected a late start to the spring selling season, dropping each month since November. Editors noticed SUVs and luxury vehicles showed the largest declines in March with minivans, compact and midsize cars, as well as small pickups having modest gains.
Black Book executive vice president of operations Anil Goyal pointed out that market-share changes reflect a continued shift away from cars and toward more SUVs and pickups.
“While the economy continues to expand, higher supply of used vehicles and affordability issues have continued to become headwinds for the industry,” Goyal said.
“The spring market is expected to provide a quick jolt to the market during April, but we expect the Index will feel the effects from slower retail demand of new vehicles that could lead to higher incentives,” he continued.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.
The index dates to January 2005 when Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1% while during 2016, the index fell by just 6.4%.
During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used vehicle values rose higher. It continued to remain relatively stable, rising slightly until May 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index, go this website.
Every month, CrashedToys locations host auctions of motorcycles, ATVs, and watercraft. CrashedToys is a brand of Copart, an online auction company that specializes in the remarketing of motorcycles and other powersports units.
CrashedToys announced on Friday that its new facility at 8687 Weyand Ave Suite B, in Sacramento, Calif., is now open for business.
CrashedToys Sacramento hosts monthly auctions, and its next auction is scheduled on April 22 at noon PT.
“The opening of our new facility represents the success of the CrashedToys brand and the value that this unique powersports platform provides our sellers and buyers,” CrashedToys director Currey Hall said in a news release. “We look forward to serving Northern California and the Pacific Northwest with our new one-stop-shop for rebuildable powersports vehicles.”
CrashedToys Sacramento is open Monday through Friday from 8 a.m. to 5 p.m. PT. The company said eligible buyers can bid current inventory using its patented online auction platform, VB3, through the CrashedToys mobile app or at kiosks at the location during normal business hours.
Industry professionals vote each year on the annual Consignor of the Year award, honoring “individuals who encourage the use of best practices while also embracing and implementing innovation.”
ARI said in a news release that during the Conference of Automotive Remarketing in March in Las Vegas, the company's manager of remarketing operations Chris Clarke was named the 2019 Consignor of the Year.
Clarke has served for 25-plus years in the automotive sector and has worked in just about every area of the remarketing industry, according to ARI. Clarke has worked as a buyer, seller, and consignor of vehicles. He has also partnered with auctions, dealers, and online sellers.
In addition, Clarke currently serves on the International Automotive Remarketers Alliance board of directors.
“I’m extremely honored to receive this award and represent ARI as well as all the extraordinary individuals whose unwavering commitment to service excellence makes our remarketing team among the very best the industry has to offer,” Clarke said in a news release.
“Remarketing from the fleet management perspective is all about leveraging the latest technology to maximize exposure and find the right buyer for each unit. Our strategy helps establish standards, raise transparency, develop training, and drive innovation that continues to shape the remarketing industry,” he said.
A giveaway of a new 2018 Tesla Model 3 AWD was one of the highlights of an 18th-anniversary celebration and sale on March 13 for Dealers Auto Auction of Idaho.
In other auction news, Copart added 44 acres to its Chicago South facility, located at 89 E. Sauk Trail, Chicago Heights, Ill. As a result of the expansion, the facility is now 80 acres, which the company says will help with market growth.
Regarding the Dealers Auto Auction of Idaho news, hundreds of dealers attended the event, and Kendall Superstore of Nampa, Idaho won the Tesla. Buyers and sellers who participated in a DAA Idaho promotional lane were eligible for the prize. The anniversary sale featured more than 600 units, including additional free in-lane perks, food and festivities.
By adding two double blocks, Dealers Auto Auction of Idaho doubled its capacity last year. The expansion allows all four lanes to run four streams of vehicles simultaneously. The sale, located just west of Boise, runs about 500 units each Wednesday, with weekly participation from more than 250 dealers in addition to more who attend online.
An annual mid-summer classic car auction with nearly 100 vehicles is another DAA Idaho event. In 2017, the sale attracted national attention as the auction ran more than 65 classic vehicles from an Idaho farmer’s collection and more than 100 total vehicles with a 96-percent sales rate. The national TV program Strange Inheritance featured the auction prominently in covering the event.
Country entertainers Aaron Tippin, Restless Heart, and Ira Dean performed at last year’s concert. Tracy Byrd will perform on the evening of July 30 for this year’s sale, which will take place July 31.
“Giving away a brand-new Tesla was certainly fun and created a lot of excitement for months at the auction,” DAA Idaho owner and general manager Russ Smith said in a news release. “Our staff did a tremendous job handling the large number of dealers and consignors and putting this anniversary sale together.”
Auction Management Solutions president Tom Stewart congratulated the entire DAA Idaho team on the anniversary event. DAA Idaho is also a member of AMS Auction Network created by AMS, an automotive consulting firm with a network of 23 independent auto auctions across the U.S.
“This auction is firing on all cylinders,” Stewart said. “They are getting attention from consignors and dealers throughout the western United States. The Tesla was one of the most impressive ‘giveaways’ I’ve seen in my career and generated a lot of attention.”
Regarding the Copart Chicago South news, the company’s chief executive officer Jay Adair said in a news release, “This expansion is a great win for our business and helps grow our footprint in the region to meet buyer and seller needs.”
Auctions are held every Friday at noon central time at the location. Eligible buyers can bid on current inventory using its proprietary online auction platform, VB3 or at kiosks at the location during normal business hours.
“I am thrilled that we will be able to meet our client needs with the expansion of this yard,” Copart Chicago South general manager Don Winn said.
