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

Tom Kon­tos
Exec­u­tive VP & Chief Econ­o­mist
ADESA Ana­lyt­i­cal Ser­vices

Whole¬≠sale prices were down in Novem¬≠ber from Octo¬≠ber and were essen¬≠tial¬≠ly flat com¬≠pared to Novem¬≠ber 2014. As seen in pre¬≠vi¬≠ous months, that month¬≠ly price increase was dri¬≠ven pri¬≠mar¬≠i¬≠ly by truck prices. Off-rental units con¬≠tributed to price gains, but that upward tick can be deceiv¬≠ing giv¬≠en that ‚Äúcon¬≠ver¬≠sion rates‚ÄĚ (units sold as a per¬≠cent¬≠age of units offered) reached or exceed¬≠ed ask¬≠ing prices in man¬≠u¬≠fac¬≠tur¬≠er and car rental auc¬≠tion sales. More of the price soft¬≠ness came from the grow¬≠ing off-lease vol¬≠ume in three-year old used vehi¬≠cles.

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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