Kontos Kommentary — June 2015

Cur­rent Used Vehi­cle Mar­ket Con­di­tions

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Sum­ma­ry

Aver­age whole­sale used vehi­cle prices fell sig­nif­i­cant­ly again in June rel­a­tive to May, though they remained high­er than year-ago lev­els.  Besides sea­son­al fac­tors, sup­ply growth is con­tin­u­ing to put down­ward pres­sure on prices, though this impact remains some­what masked by a “rich­er mix” of high­er-priced off-rental man­u­fac­tur­ers pro­gram vehi­cles and off-lease units dis­cussed in pre­vi­ous com­men­taries.

Used vehi­cle retail sales were at rel­a­tive­ly high lev­els, though down a bit from May.

Details

Accord­ing to ADESA Ana­lyt­i­cal Ser­vices’ month­ly analy­sis of Whole­sale Used Vehi­cle Prices by Vehi­cle Mod­el Class1, whole­sale used vehi­cle prices in June aver­aged $10,192 – down 2.5% com­pared to May, but up 2.4% rel­a­tive to June 2014.  Increased sup­plies of com­pact cars played a role in soft­er prices for those vehi­cles in June.  The SUV mod­el class­es also saw some cor­rec­tion in prices dur­ing the month, though prices remain high for SUVs on a year-over-year basis, as the fuel price envi­ron­ment has been favor­able to larg­er vehi­cles.

Aver­age whole­sale prices for used vehi­cles remar­ket­ed by man­u­fac­tur­ers were up 0.3% month-over-month but down 6.9% year-over-year, as off-rental pro­gram vehi­cles con­tin­ue to be in high abun­dance.  Prices for fleet/lease con­signors were down 2.6% sequen­tial­ly and down 1.5% annu­al­ly.  Rental risk vehi­cles were part­ly to blame here, as a large num­ber of old­er, rougher, high-mileage units were de-fleet­ed.  Deal­er con­signors also saw a 2.6% price decrease ver­sus May, but enjoyed a 2.7% increase rel­a­tive to June 2014.

Data from NADA showed a 2.5% year-over-year increase in used vehi­cle sales by fran­chised deal­ers and a 3.6% increase for inde­pen­dent deal­ers in June.  CPO sales were down 8.4% month-over-month from last month’s record sales, but up 17.6% year-over-year, accord­ing to fig­ures from Auto­da­ta.

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