KAR’s new analysis again shows ‘significant price softening’

CARMEL, Ind. - 

KAR Auction Services chief economist Tom Kontos reported overall wholesale prices in May rose nearly 4 percent year-over-year. But a recent addition to Kontos’ analysis in order to give the industry a better understanding “once again shows significant price softening.”

According to ADESA Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale used vehicle prices in May averaged $11,138. The May figure ended up flat compared to April but 3.9 percent relative to May of last year.

Kontos explained that the year-over-year rise came mostly from larger vehicles, including full-size cars, midsize and full-size SUVs/CUVs and full-size pickups. He also pointed out that the year-over-year growth in minivan prices is exaggerated by newer models as discussed in January’s Kontos Kommentary.

“Average wholesale prices in May were flat versus April but up on a year-over-year basis, primarily due to the strength of truck prices and a younger mix resulting from off-lease supply growth,” Kontos said.

“As introduced last month, a drill-down into the data clearly reveals price softening when accounting for sale type and vehicle age, model class and mileage,” he continued.

Kontos again took a look at fleet/lease sales of 3-year-old vehicles with 36,000 to 45,000 miles. He found that May prices for midsize SUVs and CUVs softened by $225 or 1.1 percent year-over-year to settle at $20,225.

The drop-off for midsize cars in this analysis was even steeper as May prices softened by $685 or 5.6 percent to fall below $12,000, landing at $11,595.

“We will continue to monitor and report this information as a supplement to the averages traditionally provided here,” Kontos said while also elaborating in an as well as at the top of this page.

Elsewhere, Kontos mentioned that average wholesale prices for used vehicles remarketed by manufacturers in May rose 3.3 percent month-over-month and up 4.9 percent year-over-year.  Overall May prices for fleet/lease consignors ticked down 0.2 percent sequentially but rose 3.5 percent annually.

Kontos added that average prices for dealer consignors were up 0.2 percent versus April and up 5.9 percent relative to May of last year.

Kontos closed by mentioning data from the National Automobile Dealers Association that indicated May retail used vehicle sales by franchised and independent dealers were down a combined 2.8 percent year-over-year. As also reported by AuSM, May certified pre-owned sales climbed 7.0 percent year-over-year, according to figures from Autodata.

ADESA Wholesale Used-Vehicle Price Trends
   Average  Price  ($/Unit)  Latest  Month Versus
   May 2017  April 2017  May 2016  Prior Month  Prior Year
 Total All Vehicles  $11,138  $11,141  $10,718  0.0%  3.9%
 Total Cars  $8,954  $8,968  $8,952  -0.2%  0.0%
 Compact Car  $6,832  $6,805  $6,835  0.4%  0.0%
 Midsize Car  $7,970  $7,962  $8,045  0.1%  -0.9%
 Full-size Car  $8,395  $8,504  $7,864  -1.3%  6.8%
 Luxury Car  $13,765  $13,317  $13,740  3.4%  0.2%
 Sporty Car  $14,313  $14,694  $14,207  -2.6%  0.7%
 Total Trucks  $13,244  $13,187  $12,673  0.4%  4.5%
 Minivan  $9,117  $9,060  $7,932  0.6%  14.9%
 Full-size Van  $13,005  $13,009  $13,457  0.0%  -3.4%
 Compact SUV/CUV  $10,888  $11,083  $10,851  -1.8%  0.3%
 Midsize SUV/CUV  $11,845  $11,773  $11,484  0.6%  3.1%
 Full-size SUV/CUV  $14,075  $14,085  $13,502  -0.1%  4.2%
 Luxury SUV/CUV  $19,312  $19,055  $19,175  1.3%  0.7%
 Compact Pickup  $9,367  $9,326  $9,283  0.4%  0.9%
 Full-size Pickup  $16,775  $16,520  $15,857  1.5%  5.8%

Source: ADESA Analytical Services.

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