Used Vehicle Prices Continue Gains
In his March Current Used Vehicle Market Conditions and Outlook, Adesa's Tom Kontos reports that average used vehicle prices rose sequentially for the fifth month in a row.
According to ADESA Analytical Services’ monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class, wholesale used vehicle prices in March averaged $9,880—a 5.5 percent increase over February. Cumulatively, average prices have risen by almost $1,250 since their trough in October, though they remain down 1.5 percent year-over-year.
All vehicle model class segments experienced month-over-month increases in average prices, and full-size SUVs and pickups were both up year-over-year. Mid-size and full-size cars also registered year-over-year average price increases.
Year-over-year, March average prices for vehicles sold in manufacturer sales were up 1.1 percent, fleet/lease sales prices were down 3.5 percent and dealer consignment sales prices were down 6.1 percent. However, prices were up for all three groups compared to February. Auction industry sales volumes rose by 18.2 percent compared to February, although volumes were down 7.3 percent compared to year-ago levels. ADESA Analytical Services estimates that generally improving sales prices, conversion rates well above the 60 percent norm, and higher sales volumes combined to lower inventory levels to approximately 44 days at the end of March compared to over 70 days at 2008 year-end and 39 days at the end of March 2008. The working down of inventories will continue to put upward pressure on prices in light of still-strong demand.
Based on data from CNW Marketing/Research, March retail used vehicle unit sales were up by more than 35 percent versus February for both franchised and independent dealers. However, retail used vehicle sales were down on a year-over-year basis by 4.3 percent for franchised dealers, 10.9 percent for independent dealers, and 7.5 percent overall. Certified used vehicle sales in March were also up on a sequential basis (by 6.4 percent) but down year-over-year (by 12.6 percent) according to Autodata. It should also be noted that franchised dealers sold almost as many used vehicles in March (830,562 according to CNW) as they did new vehicles (857,982 according to Automotive News).