November 2019 Kontos Kommentary: Current Used Vehicle Market Conditions

Summary

It doesn’t show signs of stopping. That’s a holiday season phrase that can be applied to November’s continuation of general softening in used vehicle values, as overall average prices fell on a month-over-month basis for the sixth month in a row. This was true despite another month of strong CPO sales, which are nonetheless a positive factor for late-model (especially off-rental and off-lease) values.

Details

According to KAR Global Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale prices in November averaged $10,924 – down 1.9% compared to October but up 3.1% relative to November 2018, as seen in the following table:

Average prices in all car and truck segments were either flat or down on a month-over-month basis.  Several segments (compact cars, midsize cars, fullsize cars, minivans, compact SUV/Crossovers, and fullsize SUV/Crossovers) had both month-over-month and year-over-year decreases.

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 midsize cars but down for midsize SUV/CUVs, as seen in the following table:

This is the second consecutive year-over-year-price decline for off-lease midsize SUV/Crossovers and may be indicative of oversupply of these units.

Average wholesale prices for used vehicles remarketed by manufacturers were down 0.6% month-over-month but up 5.1% year-over-year. Prices for fleet/lease consignors were down 3.2% sequentially but up 3.0% annually. Average prices for dealer consignors were down 1.6% versus October and down 0.7% relative to October 2018.

Based on NADA data, retail used vehicle sales by franchised and independent dealers were down 12.5% month-over-month but up 6.7% year-over-year in November. On a year-to-date basis, sales are up 1.8%.  November CPO sales were up 3.1% from the prior month and up 15.0% year-over-year, according to figures from Autodata. On a year-to-date basis, CPO sales are up 3.9% versus last year.

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 Global Analytical Services segregates these transactions to study trends by vehicle model class, sale type, model year, etc.

Disclaimer: 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.

Forward-Looking Statements: The statements contained in this report and statements that the company may make orally in connection with this report that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry and business) may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “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