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January 2019 Kontos Kommentary

Current Used Vehicle Market Conditions and Outlook


Summary

Average wholesale prices in January fell on a year-over-year basis for the third month in a row, though they were up seasonally. Auction prices for off-lease units were again a major bright spot, as upstream remarketing continues to be effective in distributing supply across multiple channels. Retail sales were affected by severe weather conditions.


Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in January averaged $10,761 – up 1.3% compared to December but down 2.0% relative to January 2018. All segments other than Compact SUV/CUVs and Compact Pickups were down on a year-over-year basis.

When holding constant for sale type, model-year age, mileage, and model class segment -- using criteria that characterize off-lease units -- prices were up significantly on a year-over-year basis for both midsize cars and midsize SUV/CUVs, as seen in the following table:

 

 

As the table shows, car prices went up more than truck prices, as incoming supply has been skewed towards trucks.

Average wholesale prices for used vehicles remarketed by manufacturers were down 2.6% month-over-month and down 2.9% year-over-year. Prices for fleet/lease consignors were up 1.9% sequentially and up 3.9% annually. Average prices for dealer consignors were down 1.6% versus December and down 2.1% relative to January 2018.

January CPO sales were down 10.9% from the prior month and down 1.8% year-over-year, according to figures from Autodata.

 

1 The analysis is based on over 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.

Wholesale Price Data by Model Class Segment - January 2019
Wholesale Price Data by Model Class Segment History 2015-012019
Wholesale Price Data by Model Class Segment - Full History 2011 - 012016
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012

Kontos Kommentary - January 2019