August 2019 Kontos Kommentary: Current Used Vehicle Market Conditions

Summary

Average wholesale prices in August fell relative to July but remained up on a year-over-year basis.  The year-over-year price growth was due to the strength and growing share of truck-segment sales, as car prices fell on a monthly and annual basis overall, though they remained up for off-lease units.  CPO sales were strong in August and continue to support off-lease vehicle prices.

Details

According to KAR Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in August averaged $11,244 – down 1.8% compared to July but up 1.8% relative to August 2018.  All segments showed month-over-month declines in average prices except fullsize vans and fullsize SUV/Crossovers.

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

Fleet/Lease Sales of Three-MY-Old Units with 36K-45K Miles
Average PricesY/Y Variance
Model ClassAugust 2019August 2018$%
Midsize Car$12,671$12,460$2111.7%
Midsize SUV/CUV$21,252$20,932$3201.5%

Average wholesale prices for used vehicles remarketed by manufacturers were up 2.4% month-over-month and up 5.3% year-over-year.  Prices for fleet/lease consignors were down 1.5% sequentially but up 1.2% annually.  Average prices for dealer consignors were down 2.0% versus July but up 0.2% relative to August 2018. Based on NADA data, retail used vehicle sales by franchised and independent dealers were down 0.4% month-over-month but up 4.0% year-over-year in August.  August CPO sales were up 10.2% from the prior month and up 11.3% year-over-year, according to figures from Autodata.  On a year-to-date basis, CPO sales are up 3.1% versus last year.

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. KAR 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 Articles