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June 2014 Kontos Kommentary

Current Used Vehicle Market Conditions and Outlook


Summary

Wholesale prices in June softened more than their usual seasonal tendency, although they remain significantly above year-ago levels. There was a bit of a respite in year-over-year retail used vehicle sales growth after strong months in March, April and May. June was a great month for new vehicle sales, however, and the associated trade-in activity should result in some attractive retail units along with additional wholesale supply.


Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in June averaged $10,004 -- down 3.1% compared to May, and up 4.7% relative to June 2013. Prices softened on a month-over-month basis across virtually all model classes, with midsize SUVs being the hardest hit .

Prices for used vehicles remarketed by manufacturers were actually up 0.6% month-over-month (for those units that were not no-saled), though down 0.1% year-over-year, reflecting volume pressure. Prices for fleet/lease consignors were down 3.9% sequentially and up 2.5% annually. Dealer consignors saw a 2.3% average price decrease versus May, and a 3.4% uptick versus June 2013.

Based on data from CNW Marketing/Research, retail used vehicle sales in June were up 2.0% month-over-month but down 5.6% year-over-year. Sales of certified pre-owned (CPO) vehicles were down 7.4% versus May and down 2.4% from the prior year, based on figures from Autodata.

1 The analysis is based on over six million annual sales transactions from over 150 of the largest U.S. wholesale auto auctions, including those of ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle 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.

Wholesale Price Data by Model Class Segment - June 2014
Wholesale Price Data by Model Class Segment - Full History 2011 - 062014
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012