The effects of increased supply are starting to become more evident in the wholesale market.

Commenting on the first year-over-year decline in used-car prices in a year, ADESA’s Tom Kontos said in his latest Kontos Kommentary report:  “We now see a clearer picture of the downward pressure that supply growth is putting on prices.”

The picture for August was this: average wholesale prices were off 0.2 percent at $9,575.

This marks the first year-over-year dip since last August, Kontos said in the report recapping ADESA Analytical Services' monthly analysis of wholesale values. 

Pricier, late-model off-rental program vehicle sales have slowed down from once-high levels, Kontos added. So that means the year-over-year comparison, at least when it comes to the makeup of seller types, can be viewed with “more of an apples-to-apples” lens.

Offering its take on auction volume, Kelley Blue Book analysts point out in a recent report that auction lane volume jumped 5 percent (or, put another way, more than 23,000 units) on a month-over-month basis in July. 

KBB also mentions in the Blue Book Market Report that there has been a steady uptick in auction volume since June.

“In August, Kelley Blue Book field analysts reported seeing approximately a 25- to 30-percent decrease in auction volumes for General Motor vehicles as well as German manufacturers BMW and Mercedes-Benz,” KBB says in the report.

“The decrease in the volumes for these manufactures likely is due to the holding of inventory in an effort to not oversaturate the market with vehicles in an effort to maintain vehicle value levels,” analysts added. “Conversely, field analysts have reported a spike in Land Rover vehicles throughout the auction lanes this past month, which may be linked to an oversupply in inventory of particular models at the moment.”

According to the most recently updated Economic Dashboard from the National Auto Auction Association, auction volume was up 7.7 percent in July (against comparable weeks of 2014), with the year-to-date increase at 7.4 percent.

Impact of incentives on price

Going to back to his monthly report, Kontos also touches on another factor that has worked in conjunction with increased supply to help drive down price:  “Moreover, though retail used-vehicle demand has been strong, average new-car incentives have been climbing, which puts further downward pressure on used-vehicle prices. These impacts are most evident in car prices, as truck prices have held up well in the current low fuel price environment.”

Case in point, truck prices were up 9.8 percent year-over-year in August and car prices were down 5.2 percent. Crossover prices were down 5.1 percent.