March 2012 Kontos Kommentary

Current Used Vehicle Market Conditions


In con­trast to the mild year-over-year soft­en­ing seen in Jan­u­ary and Feb­ru­ary, whole­sale used vehi­cle prices rose at a greater than sea­son­al pace in March, reflect­ing con­tin­ued tight sup­ply and strong retail demand.  Aver­age auc­tion prices climbed above $10,000 for the first time since last June and more than matched last year’s March/April Spring tax sea­son peak.


Accord­ing to ADESA Ana­lyt­i­cal Ser­vices’ month­ly analy­sis of Whole­sale Used Vehi­cle Prices by Vehi­cle Mod­el Class1, whole­sale used vehi­cle prices in March aver­aged $10,612 – up 7.5% com­pared to Feb­ru­ary and up 0.6% ver­sus March 2011.  The impact of high gas prices was more sub­dued this month after whole­sale prices adjust­ed to ris­ing fuel prices more sig­nif­i­cant­ly in Feb­ru­ary (gen­er­al­ly up for cars and down for trucks).

Man­u­fac­tur­ers reg­is­tered a 6.1% month-over-month price increase and an 18.8% year-over-year rise, reflect­ing con­tin­ued tight sup­plies of late-mod­el used vehi­cles.  Fleet/lease con­signors expe­ri­enced a 7.5% sequen­tial price increase and a 3.5% annu­al increase.  Deal­er con­signors saw a 7.7% aver­age price increase ver­sus Feb­ru­ary and an 8.5% uptick ver­sus March 2011.

Based on data from CNW Marketing/Research, retail used vehi­cle sales in March were up 5.4% year-over-year for fran­chised deal­ers but down 3.2% for inde­pen­dent deal­ers, pos­si­bly reflect­ing bet­ter used vehi­cle shop­per traf­fic and sales at fran­chised deal­er­ships as a com­ple­ment to fair­ly strong new vehi­cle sales dur­ing the month.  On a month-over-month basis, retail used vehi­cle sales were up by over a third for both groups.  Cer­ti­fied used vehi­cle sales in March were at record lev­els — up 16.8% ver­sus Feb­ru­ary and up 7.7% ver­sus pri­or year — accord­ing to Auto­da­ta.

1The analy­sis is based on near­ly six mil­lion annu­al sales trans­ac­tions from over 170 of the largest U.S. whole­sale auto auc­tions, includ­ing those of ADESA as well as oth­er auc­tion com­pa­nies. ADESA Ana­lyt­i­cal Ser­vices seg­re­gates these trans­ac­tions using the J.D. Pow­er and Asso­ciates Vehi­cle Seg­men­ta­tion Guide to study trends by mod­el class.

The views and analy­sis pro­vid­ed here­in relate to the vehi­cle remar­ket­ing indus­try as a whole and may not relate direct­ly to KAR Auc­tion Ser­vices, Inc. The views and analy­sis are not the views of KAR Auc­tion Ser­vices, its man­age­ment or its sub­sidiaries; and their accu­ra­cy is not war­rant­ed. The state­ments con­tained in this report and state­ments that the com­pa­ny may make oral­ly in con­nec­tion with this report that are not his­tor­i­cal facts are for­ward-look­ing state­ments. Words such as “should,” “may,” “will,” “antic­i­pates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “esti­mates,” “bode”, “promis­es”, “like­ly to” and sim­i­lar expres­sions iden­ti­fy for­ward-look­ing state­ments. For­ward-look­ing state­ments are sub­ject to risks and uncer­tain­ties that could cause actu­al results to dif­fer mate­ri­al­ly from the results pro­ject­ed, expressed or implied by the for­ward-look­ing state­ments. Fac­tors that could cause or con­tribute to such dif­fer­ences include those mat­ters dis­closed in the company’s Secu­ri­ties and Exchange Com­mis­sion fil­ings. The com­pa­ny does not under­take any oblig­a­tion to update any for­ward-look­ing state­ments.



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