April price data reflects auction effectiveness

CARMEL, Ind. - 

Going beyond just the metrics, KAR Auction Services chief economist Tom Kontos explained why the latest wholesale price movements reflect auction successes — especially when it comes to handling off-lease vehicles.

According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, values in April averaged $11,116, which represented a 2.7-percent lift compared to March but a 0.2-percent dip relative to April of last year.

Analysts indicated average prices were down on a year-over-year basis for both cars and trucks, but luxury cars and minivans were segments with significant volume that had strong year-over-year price gains.

“Average wholesale used vehicle prices registered their second consecutive year-over-year price decline in April,” Kontos said in his latest installment of the Kontos Kommentary. However, April prices were seasonally strong, despite softer retail demand. 

“Prices appeared to be particularly strong for off-lease vehicles, which is testimony to the effectiveness of upstream sales in preventing oversupply of these units at physical auctions,” he continued.

Kontos also continued his deep dive into trends involving fleet and off-lease vehicles that are 3 years old with less than 45,000 miles on the odometer.

When holding constant for sale type, model-year age, mileage, and model class segment, he found that average prices moved higher on a year-over-year basis for both midsize cars and midsize SUV/CUVs. Midsize car prices climbed 4.0 percent or $465 to $12,180 while prices for midsize SUVs and CUVs rose 4.3 percent or $875 to $21,233.

“This analysis indicates that wholesale values for off-lease units are holding up well despite the overall softening market trend and is evidence of the effectiveness of new remarketing approaches in redistributing supply into various sales channels,” Kontos said.

Drilling deeper into the April data, Kontos went on to note that average wholesale prices for used vehicles remarketed by manufacturers rose 4.6 percent month-over-month and 11.5 percent year-over-year.

Prices for fleet/lease consignors were up 2.3 percent sequentially and up 5.8 percent annually.

And average prices for dealer consignors were up 4.5 percent versus March but down 1.5 percent relative to April of last year.

Kontos closed with data he collected from the National Automobile Dealers Association that showed retail used-vehicle sales by franchised dealers softened 12.6 percent year-over-year and  12.0 percent on the same time comparison for independent dealers.

Kontos added that April certified pre-owned sales were down 14.6 percent from the prior month and down 5.8 percent year-over-year, according to figures from Autodata Corp.

“It should be noted that both the NADA and Autodata sales numbers are based on fewer selling days in April, which tends to overstate the declines,” Kontos said. “On a year-to-date basis, CPO sales are up 1.5 percent versus last year.”               

Kontos elaborated about the market in a video available here and at the top of this page.

ADESA Wholesale Used-Vehicle Price Trends

   Average  Price  ($/Unit)  Latest  Month Versus
   April 2018  March 2018  April 2017  Prior Month  Prior Year
           
 Total All Vehicles  $11,116  $10,824  $11,141  2.7%  -0.2%
           
 Total Cars  $8,778  $8,595  $8,968  2.1%  -2.1%
 Compact Car  $6,562  $6,611  $6,805  -0.7%  -3.6%
 Midsize Car  $7,701  $7,591  $7,962  1.5%  -3.3%
 Full-size Car  $7,553  $7,274  $8,504  6.6%  -8.8%
 Luxury Car  $13,474  $13,088  $13,317  2.9%  1.2%
 Sporty Car  $14,625  $14,194  $14,694  3.0%  -0.5%
           
 Total Trucks  $13,139  $12,779  $13,187  2.8%  -0.4%
 Minivan  $9,901  $9,876  $9,060  0.2%  9.3%
 Full-size Van  $13,807  $13,195  $13,005  4.6%  6.2%
 Compact SUV/CUV  $11,096  $10,777  $11,083  3.0%  0.1%
 Midsize SUV/CUV  $11,425  $11,031  $11,773  3.6%  -3.0%
 Full-size SUV/CUV  $13,878  $13,379  $14,085  3.7%  -1.5%
 Luxury SUV/CUV  $18,645  $18,290  $19,055  1.9%  -2.2%
 Compact Pickup  $9,407  $8,905  $9,326  5.6%  0.9%
 Full-size Pickup  $16,137  $15,707  $16,520  2.7%  -2.3%

Source: ADESA Analytical Services.

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