Senior Editor
The volume of late-model vehicles in the auction lanes slowed down slightly in the last full month of fall, but the latest year-to-date data and forecasts for coming years indicate big spikes in supply.
According to the latest Guidelines report from J.D. Power Valuation Services, there was a 0.8-percent month-over-month decline in late-model auction volume in November. Year-over-year, it was down 2 percent.
However, J.D. Power’s report indicates that late-model volume was up 4.4 percent year-to-date through November.
And there could be more on the way, given the off-lease trends that RVI Group shared in its latest quarterly analysis.
The firm said 22.9 percent of new-vehicle sales in the third quarter were leases, with historically strong lease penetration rates expected to stick around through 2019.
And RVI’s lease supply index was up 13.8 percent year-over-year in November.
“As a result of the strong leasing rates over the past two years, we expect off-lease supply to continue growing through 2020,” the firm said its report.
Going back to the J.D. Power report, trucks and SUVs have led the way in terms of auction volume gains, with a 53.1-percent increase in year-to-date compact premium SUV volume and a 17.9-percent uptick for compact SUVs.
RVI points out the 3-year rise in leases for small SUVs is likely to impact prices in those segments when those leases end.
“As the increasing off-lease supply of small SUVs enters the market, we expect real used vehicle prices for the small SUV segment to decline by 9.7 percent below current levels by 2020,” RVI noted.
While down from second-quarter levels (27.6 percent), lease penetration in the segment was still a strong 26.5 percent in the third quarter, according to RVI.