The following commentary is produced monthly by Tom Kontos, Executive Vice-President, ADESA Analytical Services. ADESA is a leading provider of wholesale used vehicle auctions and ancillary remarketing services. As part of the KAR Auction Services family, ADESA works in collaboration with its sister company, Insurance Auto Auctions a leading salvage auto auction company, to provide insights, trends and highlights of the entire automotive auction industry.
Average wholesale used vehicle prices in September were virtually flat with August and down on a year-over-year basis by considerably less than the last three months — an indication of stability as opposed to continuation of the softening pattern seen since Spring, albeit based on only one month’s results.
September was a good month for the retail new and used markets, as sales and prices were strong, driving demand in the auction lanes and online.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in September averaged $9,550 – up 0.3% compared to August and down 2.1% relative to September 2011. By comparison, the year-over-year average price drops during the Summer months were in the four-percent range, almost double September’s drop.
Segments with significantly higher prices in September versus August were Fullsize Cars, Fullsize Vans and Fullsize SUVs, though luxury cars and luxury SUVs also showed notable price growth. Our new Crossover segments showed modest price growth.
Prices for used vehicles remarketed by manufacturers fell by 6.6% month-over-month in September, and were down 0.9% year-over-year, indicating downward price pressure on manufacturers’ vehicles as more off-rental vehicles began entering the market after Labor Day. Fleet/lease consignors experienced a modest 0.5% decrease in September, leaving prices down 0.4% year-over-year. Dealer consignors saw a 1.4% average price decrease versus August, resulting in prices being down 2.2% versus September 2011.
Based on data from CNW Marketing/Research, retail used vehicle sales in September were up 12.5% year-over-year for franchised dealers and 13.6% for independent dealers. September sales of certified used vehicles were down 3.4% month-over-month but up by 9.1% year-over-year based on data from Autodata.
1The analysis is based on nearly six million annual sales transactions from over 150 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.
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.