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April 2016 Kontos Kommentary

Current Used Vehicle Market Conditions and Outlook


Summary

The traditional Spring tax-season market appeared to wane in April, as average wholesale prices rose only modestly on both a sequential and annual basis. As in previous months, drilling down into the data reveals softness due to supply growth that is not as evident in the top-line numbers. On a positive note, retail used vehicle sales rebounded from the March Easter holiday impact, continuing their healthy pattern of absorbing the growing supply without dramatic deterioration in prices.


Details

According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in April averaged $10,881 – up 0.8% compared to March and up 1.7% relative to April 2015. The wholesale market remains bifurcated, however, with car prices down on both a month-over-month and year-over-year basis, while truck prices were up.

Average wholesale prices for used vehicles remarketed by manufacturers were down 2.8% month-over-month and down 5.4% year-over-year. Prices for fleet/lease consignors were down 0.9% sequentially and down 3.1% annually. Only dealer consignors saw increases in average prices, registering a 2.7% increase versus March and a 2.2% increase relative to April 2015.

Data from NADA showed a 6.7% year-over-year increase in retail used vehicle sales by franchised dealers and a 3.4% increase for independent dealers in April, and both were up significantly up month over month as sales rebounded from the Easter holiday impact in March. April CPO sales were down 4.6% month-over-month but were up 8.3% 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 - April 2016
Wholesale Price Data by Model Class Segment History 2015-042016
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 - April 2016