July 2019 Kontos Kommentary: Current Used Vehicle Market Conditions

Summary

Average wholesale prices in July were flat relative to June and remained up on a year-over-year basis largely on the price strength and growing share of truck-segment sales.  CPO sales continue to buoy off-lease vehicle prices.

Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in July averaged $11,452 – down 0.2% compared to June but up 5.1% relative to July 2018.  All segments showed month-over-month declines in average prices except compact cars, compact pickups and fullsize pickups.

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 both midsize cars and midsize SUV/CUVs, as seen in the following table:

Fleet/Lease Sales of Three-MY-Old Units w/ 36K-45K Miles
Average PricesY/Y Variance
Model ClassJuly 2019July 2018$%
Midsize Car$12,670$12,169$5014.1%
Midszie SUV/CUV$21,323$20,541$7833.8%

Average wholesale prices for used vehicles remarketed by manufacturers were up 2.7% month-over-month and up 6.1% year-over-year.  Prices for fleet/lease consignors were up 0.4% sequentially and up 4.3% annually.  Average prices for dealer consignors were down 1.2% versus June and up 4.1% relative to July 2018.

Based on NADA data, retail used vehicle sales by franchised and independent dealers were down 2.1% month-over-month and 1.9% year-over-year in July.  July CPO sales were down 1.8% from the prior month but up 6.0% year-over-year, according to figures from Autodata.  On a year-to-date basis, CPO sales are up 1.9% 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