September 2016 Kontos Kommentary
Current Used Vehicle Market Conditions and Outlook
Average wholesale values were flat in September, but remained up on a year-over-year basis primarily on the strength of truck prices and a higher proportion of pricier off-lease units. Retail used vehicle sales, including CPO sales, were relatively weak, though both remain up for the year.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in September averaged $10,734 – flat at 0.0% compared to August but up 5.1% relative to September 2015. Average prices for cars were up modestly on a year-over-year basis (0.3%), while truck prices were up significantly (7.3%), driving the overall year-over-year increase. Particularly hard-hit during the month were mid-size cars, while luxury cars had a nice bounce. Mini-vans also saw solid price growth during the month.
Average wholesale prices for used vehicles remarketed by manufacturers were up 1.6% month-over-month and up 7.1% year-over-year. Prices for fleet/lease consignors were down 1.0% sequentially but up 1.0% annually. Dealer consignors registered a 2.0% average price decrease versus August but a 4.3% increase relative to September 2015.
According to NADA data, franchised dealers saw a 9.4% month-over-month decrease in retail used vehicle sales, while independent dealers registered a 3.1% sales loss. For the year, however, retail used vehicle sales are up 5.0%. September CPO sales were down 1.4% year-over-year and down 10.8% month-over-month, according to figures from Autodata. For the year, however, sales have already topped the two million mark and are up 3.7%.
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 - September 2016
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