CARMEL, Ind. — Average wholesale used vehicle prices fell significantly in June relative to May, though they remained higher than year-ago levels, according to ADESA’s Chief Economist Tom Kontos.
“Besides seasonal factors, supply growth is continuing to put downward pressure on prices, though this impact remains somewhat masked by a ‘richer mix’ of higher-priced off-rental manufacturer’s program vehicles and off-lease units discussed in previous commentaries,” Kontos wrote in the June edition of the Kontos Kommentary.
Used vehicle retail sales were at relatively high levels during the month, though they were down a bit from May, he added. Data from the National Automobile Dealers Association showed a 2.5% year-over-year increase in used vehicle sales by franchised dealers and a 3.6% increase for independent dealers in June. Certified pre-owned sales were down 8.4% month-over-month from last month’s record sales, but up 17.6% year-over-year, according to figures from Autodata.
The firm found that wholesale used vehicle prices in June averaged $10,192 — down 2.5% compared to May, but up 2.4% relative to June 2014. Increased supplies of compact cars played a role in softer prices for those vehicles in June, Kontos noted, while the SUV model classes also saw some correction in prices during the month — though prices remain high for SUVs on a year-over-year basis, as the fuel price environment has been favorable to larger vehicles.
During June, average wholesale prices for used vehicles remarketed by manufacturers were up 0.3% month-over-month but down 6.9% year-over-year, as off-rental program vehicles continue to be in high abundance, ADESA found. Prices for fleet/lease consignors were down 2.6% sequentially and down 1.5% annually.
“Rental risk vehicles were partly to blame here, as a large number of older, rougher, high-mileage units were de-fleeted,” Kontos explained. “Dealer consignors also saw a 2.6% price decrease versus May, but enjoyed a 2.7% increase relative to June 2014.”