Current Used Vehicle Market Conditions
Average wholesale used vehicle prices fell significantly again in June relative to May, though they remained higher than year-ago levels. Besides seasonal factors, supply growth is continuing to put downward pressure on prices, though this impact remains somewhat masked by a “richer mix” of higher-priced off-rental manufacturers program vehicles and off-lease units discussed in previous commentaries.
Used vehicle retail sales were at relatively high levels, though down a bit from May.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in June averaged $10,192 – down 2.5% compared to May, but up 2.4% relative to June 2014. Increased supplies of compact cars played a role in softer prices for those vehicles in June. The SUV model classes also saw some correction in prices during the month, though prices remain high for SUVs on a year-over-year basis, as the fuel price environment has been favorable to larger vehicles.
Average wholesale prices for used vehicles remarketed by manufacturers were up 0.3% month-over-month but down 6.9% year-over-year, as off-rental program vehicles continue to be in high abundance. Prices for fleet/lease consignors were down 2.6% sequentially and down 1.5% annually. Rental risk vehicles were partly to blame here, as a large number of older, rougher, high-mileage units were de-fleeted. Dealer consignors also saw a 2.6% price decrease versus May, but enjoyed a 2.7% increase relative to June 2014.
Data from NADA showed a 2.5% year-over-year increase in used vehicle sales by franchised dealers and a 3.6% increase for independent dealers in June. CPO sales were down 8.4% month-over-month from last month’s record sales, but up 17.6% year-over-year, according to figures from Autodata.