August 2015 Kontos Kommentary
Current Used Vehicle Market Conditions and Outlook
Average wholesale used vehicle prices fell on a year-over-year basis for the first time since August of 2014, as previously elevated sales of higher-priced, late-model off-rental program units have subsided and comparisons to prior year are now on more of an apples-to-apples basis in terms of seller-type composition. We now see a clearer picture of the downward pressure that supply growth is putting on prices. Moreover, though retail used vehicle demand has been strong, average new car incentives have been climbing, which puts further downward pressure on used vehicle prices. These impacts are most evident in car prices, as truck prices have held up well in the current low fuel price environment.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in August averaged $9,575 – down 3.1% compared to July and down 0.2% relative to August 2014. Car prices continue to bear the brunt of price declines, falling 5.8% month over-month and 5.2% year-over-year, while truck prices fell only modestly (0.6%) on a sequential basis and actually went up significantly (9.8%) on a year-over-year basis.
Average wholesale prices for used vehicles remarketed by manufacturers were up 1.7% month-over-month but down 9.1% year-over-year. Prices for fleet/lease consignors were up a modest 0.7% sequentially but down 2.0% annually. Dealer consignors saw a 3.6% price decrease versus July but a 2.1% increase relative to August 2014.
Data from NADA showed a 10.6% year-over-year increase in used vehicle sales by franchised dealers and a 12.4% increase for independent dealers in August. CPO sales were down 0.1% month-over-month and down 1.1% year-over-year, according to 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 - August 2015
Wholesale Price Data by Model Class Segment - Full History 2011 - 082015
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012
ADESA Canada Used Vehicle Price Index
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