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.