Off-Lease Volume Slowly Showing its Influence on Used Vehicle Prices

Tom Kon­tos
Exec­u­tive VP & Chief Econ­o­mist
ADESA Ana­lyt­i­cal Ser­vices

Whole­sale prices were down in Novem­ber from Octo­ber and were essen­tial­ly flat com­pared to Novem­ber 2014. As seen in pre­vi­ous months, that month­ly price increase was dri­ven pri­mar­i­ly by truck prices. Off-rental units con­tributed to price gains, but that upward tick can be deceiv­ing giv­en that “con­ver­sion rates” (units sold as a per­cent­age of units offered) reached or exceed­ed ask­ing prices in man­u­fac­tur­er and car rental auc­tion sales. More of the price soft­ness came from the grow­ing off-lease vol­ume in three-year old used vehi­cles.

Here’s the lat­est of edi­tion of Kon­tos Kom­men­tary

Ana­lyst Fore­casts about Prices Soft­en­ing with Used Sup­ply is Tak­ing Root:
Major sav­ing grace con­tin­ues to be strong retail demand, espe­cial­ly for CPO vehi­cles.

Soft Pric­ing Affect­ing Insti­tu­tion­al Con­signors More than Deal­ers:
Deal­ers have option of retail­ing vehi­cles and only whole­sal­ing units which can sell for attrac­tive prices.

Novem­ber Sales Up 1.1% Over Octo­ber and Mod­est 0.1% Over Novem­ber 2014:
Truck and SUV prices strong rel­a­tive to car and crossover (CUV) prices year-over-year.

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