More than a year later, Hurricane Harvey still is influencing how wholesale prices and used-vehicle sales are analyzed. The record-setting storm that blasted Texas created comparisons that might make metrics appear odd.
According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale used-vehicle prices in September averaged $10,981 — down 0.6 percent compared to August and 0.6 percent lower than September of last year.
KAR Auction Services chief economist Tom Kontos explained prices for the truck model class segments, on average, fell at a similar rate as car prices, supporting his theory that the two groups will tend to move in parity as truck supply outpaces car supply.
In his latest edition of the Kontos Kommentary, he explained how he and the company analyst team are entering the timeframe when Harvey-influenced figures will be involved, especially with their year-over-year examinations.
“As the wholesale used-vehicle market enters the period of time comparable with last year’s hurricane season, wholesale prices will be challenged to meet last year’s high, demand-driven levels,” Kontos said.
“This is reflected in average wholesale prices in September, which fell on both a month-over-month and year-over-year basis, and significantly lower retail used-vehicle sales than last year,” he continued.
“Prices for off-lease units remained strong, however, as upstream remarketing continues to deny volume from physical auctions and causes dealers unable or unwilling to participate in online-only auctions to bid aggressively on the remaining downstream units,” Kontos went on to say, elaborating further .
A regular part of Kontos’ updates also includes analysis of fleet/lease sales of 3-year-old units with mileage between 36,000 and 45,000 miles. When holding constant for sale type, model-year age, mileage, and model class segment, Kontos discovered prices were up significantly on a year-over-year basis for both midsize cars and midsize SUV/CUVs.
Prices for those midsize cars rose 6.0 percent or $699 to $12,298, while prices for those midsize SUV/CUVs climbed 4.6 percent or $901 to $20,634.
“Midsize car prices continue to outperform prices for midsize SUVs and crossovers, due, as mentioned above, to the incoming supply of trucks outpacing that of cars,” Kontos said.
“The strength of prices for both groups in this analysis indicates, again as mentioned above, that upstream sales are preventing an oversupply of off-lease units from reaching physical auction lots,” he added.
Looking at the September data for the entire market, Kontos shared that average wholesale prices for used vehicles remarketed by manufacturers softened 1.9 percent month-over-month but ticked up 0.7 percent year-over-year.
Kontos noted prices for fleet/lease consignors dipped 1.3 percent sequentially but rose 6.6 percent annually.
Furthermore, he added average prices in September for dealer consignors ticked 0.4 percent lower versus August and 0.3 percent relative to the same month last year.
Kontos closed his latest update by reviewing September sales information he received from the National Automobile Dealers Association and Autodata Corp.
Based on NADA data, Kontos said retail used-vehicle sales by franchised dealers slid 6.3 percent year-over-year in September, and deliveries dropped 8.7 percent for independent dealers.
Kontos also pointed out that September certified pre-owned sales declined 8.9 percent compared to the prior month and 3.9 percent year-over-year, according to figures from Autodata. On a year-to-date basis, he added CPO sales remain up 1.8 percent versus last year.
|Sept. 2018||Aug. 2018||Sept. 2017||Prior Month||Prior Year|
|Total All Vehicles||$10,981||$11,048||$11,046||-0.6%||-0.6%|
Source: ADESA Analytical Services. August data revised.