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May 2015 Kontos Kommentary

Current Used Vehicle Market Conditions and Outlook


Summary

Average wholesale used vehicle prices fell significantly in May relative to April, though they remained modestly higher than year-ago levels. Besides seasonal factors, supply growth put downward pressure on prices.

Used vehicle retail sales were a mixed bag in May, as franchised dealers enjoyed an uptick in sales, especially of CPO units, while independent dealers saw year-over-year declines.


Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in May averaged $10,440 – down 2.5% compared to April, but up1.1% relative to May 2014.  Only Fullsize Vans, Mini SUVs and Fullsize SUVs had month-over-month increases in average prices.

Average wholesale prices for used vehicles remarketed by manufacturers were down 0.2% month-over-month and down 6.5% year-over-year. Prices for fleet/lease consignors were down 3.0% sequentially and down 3.0% annually. Dealer consignors saw a 2.6% price decrease versus April, but enjoyed a 1.8% increase relative to May 2014.

A new data series from NADA showed a 3.6% year-over-year increase in used vehicle sales by franchised dealers, but a 1.6% decrease for independent dealers. CPO sales set new highs in May, growing 8.3% month-over-month and 12.2% 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 - May 2015
Wholesale Price Data by Model Class Segment - Full History 2011 - 052015
ADESA Analytical Services Selected Model Class Segments
Wholesale Price Data by Model Class Segment - Full History 2000 - June 2012