CARMEL, Ind. — Average wholesale used-vehicle prices fell modestly in December but remained up on a year-over-year basis, according to ADESA’s Chief Economist Tom Kontos.

“These results reflect the ongoing growth and change in the composition of wholesale supply toward greater ‘institutional’ volume (off-lease, off-rental, off-fleet, repos, etc.) versus dealer consignment volume yielding a ‘richer mix’ that elevates average prices even as supply growth applies downward pressure to those prices,” Kontos explained in the December edition of the Kontos Kommentary.

The economist also added that the change was not the only factor supporting used-vehicle prices. New-vehicle incentives have been “relatively benign,” while the sales of used cars — especially certified pre-owned vehicles — have been strong.

“…supply curtailments and disruptions due to weather and recalls occurred throughout the year; and redistribution of volume into multiple remarketing channels, all have diffused the significant impact that supply normally has on wholesale values,” he added.

The firm found that wholesale used-vehicle prices in December averaged $9,844 — down 0.3% compared to November and up 2% relative to December 2013. Luxury and sports cars experienced healthy average price increases, which Kontos attributed to dealers looking to stock such cars in time for the holidays.

Prices for used vehicles remarketed by manufacturers were up 9.6% month over month but down 2.8% year over year.

“Sale curtailments due to recalls were a factor in these December results, and ‘factory’ inventories were relatively high entering 2015,” Kontos noted. “Thus, the tailwind to prices that might have been provided by the absence of units due to these sale curtailments could turn into a headwind as these units are released in early 2015.”

On the fleet/lease side, consignors were up 1.3% sequentially but down 0.3% annually. Prices for off-rental “risk” units held up relatively well, and rental companies that capitalized on the absence of factory units did well, Kontos added.

Dealer consignors registered a 1.7% increase vs. November and a 3.0% increase relative to December 2013, indicating the wholesale market is readily absorbing excess dealer trades generated from strong new-vehicle sales.

Retail used-vehicle sales in December were down 0.3% month over month and 4.1% year over year, based on data from CNW Marketing/Research.

“Despite these December declines, retail used-vehicle sales in 2014 reached a respectable 29.6 million units, very close to last year’s total,” Kontos said.

The composition of those sales included a higher percentage of higher priced, and typically higher grossing, certified pre-owned (CPO) vehicles, which totaled 2.3 million units in 2014 vs. 2.1 million the year before. CPO sales were particularly strong in December, rising 3.9% month-over-month and 17.2% year-over-year, according to figures from Autodata.