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October 2015 Kontos Kommentary

Current Used Vehicle Market Conditions and Outlook


As in September, October average wholesale prices were driven up largely by upticks in truck prices. Still, wholesale values were solid in most model year and sale type categories, with the exceptions being off-rental risk and off-lease vehicles. The off-rental risk price declines were driven mostly by higher mileage vehicles, while the off-lease price softness reflects growing supplies of these units. Retail used vehicle sales, though down from prior-month levels, were strong on a year-over-year basis. Certified pre-owned sales continue to be strong.


According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in October averaged $9,744 – up 1.1% compared to September and 0.6% relative to October 2014. As occurred last month, prices for trucks pushed up average prices in general, although sequentially, car prices rose more than truck prices in October.

Average wholesale prices for used vehicles remarketed by manufacturers were down 0.6% month-over-month but up 5.2% year-over-year, as off-rental program units sold had a solid month (though there were a lot of no-sales). Prices for fleet/lease consignors were down 1.8% sequentially but up 1.7% annually. Off-rental risk units showed price declines resulting largely from higher mileage units. Prices for three-model-year-old vehicles, a proxy for off-lease vehicles, were down 2.0% M/M and 6.5% Y/Y. Dealer consignors saw a 0.7% price increase versus September and a 2.8% increase relative to October 2014.

Data from NADA showed a 9.1% year-over-year increase in used vehicle sales by franchised dealers and an 18.6% increase for independent dealers in September, though both were down by double digits on a month-over-month basis. CPO sales were up 1.2% month-over-month and 5.5% 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 - October 2015
Wholesale Price Data by Model Class Segment - Full History 2011 - 102015
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012