April 2019 Kontos Kommentary: Current Used Vehicle Market Conditions

Summary

The spring/tax season market reached full-bloom in April as average wholesale prices reached what will likely be peak or near-peak levels for the year based on historical seasonal trends.  Car prices moved in parity with truck prices overall on a month-over-month basis and showed particular strength in the off-lease segment at physical auctions. 

Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in April averaged $11,489 – up 3.6% compared to March and up 3.4% relative to April 2018.  Fullsize cars and minivans were the only segments that did not show month-over-month average price increases, and their declines were modest.

When holding constant for sale type, model-year age, mileage, and model class segment — using criteria that characterize off-lease units — prices were up significantly on a year-over-year basis for midsize cars but down substantially for midsize SUV/CUVs, as seen in the following table:

Average wholesale prices for used vehicles remarketed by manufacturers were up 2.9% month-over-month but down 1.6% year-over-year.  Prices for fleet/lease consignors were up 4.4% sequentially and up 4.3% annually.  Average prices for dealer consignors were up 3.6% versus March and up 1.1% relative to April 2018.

Based on Edmunds data, retail used vehicle sales by franchised dealers were up 3.8% year-over-year in April, and 2.4% year-to-date.  April CPO sales were down 12.6% from the prior month’s record levels but up 1.3% year-over-year, according to figures from Autodata.  On a year-to-date basis, CPO sales up 1.7% versus last year.

1

The analysis is based on over seven million annual sales transactions from over 250 of the largest U.S. wholesale auto auctions, including those of ADESA as well as other auction companies. ADESA Analytical Services segregates these transactions to study trends by vehicle model class, sale type, model year, etc.

The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Auction Services, Inc. The views and analysis are not the views of KAR Auction Services, its management or its subsidiaries; and their accuracy is not warranted. The statements contained in this report and statements that the company may make orally in connection with this report that are not historical facts are forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “bode”, “promises”, “likely to” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update any forward-looking statements.

Related Content