Wholesale Used Prices Softened in October, Kontos Reports
CARMEL — Wholesale used-vehicle prices continued to soften during October in all three of the traditional auction industry seller segments (factory, fleet/lease and dealer consignment), according to ADESA Auction’s Tom Kontos.
Prices in October averaged $9,842, an increase of 0.9 percent vs. September and a 0.8 percent increase vs. the year-ago month, according to ADESA Analytical Services’ analysis. Additionally, car prices continued to correct downward and truck prices corrected upward as they reset from high gas prices earlier in 2011, reported F&I and Showroom magazine.
“Wholesale prices appeared to do an about-face as they ceased their sequential and year-over-year decline seen since peaking in April,” said Kontos, executive VP, customer strategies and analytics. “With Fall defleeting in full swing, off-rental units sold by manufacturers and rental companies in the factory and fleet/lease lanes and online made up a higher percentage of total auction volumes in October.”
Kontos added that off-rental units sold in October tended to be late-model, higher-dollar units and, as a result, contributed positively to average prices for the month. “Had the same proportion of vehicles been sold by each of the seller groups in September and October, average prices would have fallen by 2 percent on both a sequential and annual basis,” Kontos said. “Based on this analysis, we would conclude that wholesale prices continued the modest softening pattern described in our previous commentaries.”
Manufacturers registered a 3.1 percent month-over-month price decrease but did record a 5.1 percent year-over-year increase. Fleet/lease consignors experienced a 3.1 percent month-over-month decrease and a 0.4 percent annual decrease.
Dealer consignors experienced a 1 percent average price decrease vs. September and a 3.2 percent increase vs. October 2010.
The company estimates that auction industry inventory levels stood at 30 days at month-end, marking the second month in a row that days-supply of auction inventories matched year-ago levels. “Auction industry inventories had been below year-ago levels from July 2009 through August 2011, by our estimates,” Kontos said. “The rise in inventory levels is primarily a reflection of higher Fall defleeting.”
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