CARMEL, Ind. —In August, prices were down on a year-over-year basis for the first time since the beginning of 2014, reported Tom Kontos, chief economist for ADESA Analytical Services. This was part of a softening trend in wholesale price.
“This should come as no surprise, as this has been an outcome we have anticipated for quite some time based primarily on our predicted growth in off-lease volume,” Kontos noted in his August Kontos Kommentary. “Retail used vehicle sales, especially for certified pre-owned units, have actually been providing a demand-side extension to the strong sellers’ market that consignors have generally enjoyed since late 2009. But with the focus on new vehicle sales in the current retail automotive market, those used vehicle sales have had a temporary lull (although not for CPO units).”
Wholesale used vehicle prices in August averaged $9,592 — down 1.6% compared to July, and down 0.4% relative to August 2013, according to stats from ADESA Analytical Services’ monthly analysis. Prices for compact cars, fullsize vans and mini, midsize and large SUVs were up on a month-over-month basis, while all other segments were down.
Prices for used vehicles remarketed by manufacturers were down 1% month-over-month and down 4.3% year-over-year, indicating weaker demand for high off-rental program vehicle inventories. Meanwhile, prices for fleet/lease consignors were down .4% sequentially and down 1.5% annually.
Prices for off-rental “risk” units within this segment were again down significantly and dealer consignors saw a 2.2% average price decrease versus July, and were also down 2.2% relative to August 2013.
Retail used vehicle sales during the month of August were down 14.8% month-over-month and down 9.4% year-over-year, according to data from from CNW Marketing/Research. However, sales of certified pre-owned (CPO) vehicles were up 11.4% versus July and up 11.1% from the prior year, based on figures from Autodata.
“Given an improving economy and employment growth, retail used vehicle sales should resume full bore in coming months, especially considering the high trade-in volume the strong new vehicle sales are generating,” Kontos concluded. “Nevertheless, used vehicle prices should continue to trend down as supply outpaces demand.”