Though modestly down from June, average wholesale used vehicle prices in July stayed above $10,000 for the second month in a row and were up on a year-over-year basis for the third month in a row. While Cash-for-Clunkers grabbed headlines and supported previously dormant new vehicle traffic and sales, retail used vehicle sales were up on a year-over-year basis for the fourth month in a row. And, lest folks think that C-4-C is leading to a 'bubble" in used car prices, those folks should remember that firming used vehicle prices resulting from low trade-in supply and strong used car demand are conditions that have been in place for the entire year.

As discussed in our upcoming mid-year issue of Pulse, ADESA Analytical Services' periodic review of macro and micro economic issues related to the used vehicle market, supply and demand conditions indicate that used vehicle prices will continue to increase on a year-over-year basis through the rest of 2009 and into 2010, though they will resume their normal seasonal patterns.

Details

According to ADESA Analytical Services' monthly analysis of Wholesale Used Vehicle Prices by Vehicle Model Class1, wholesale used vehicle prices in July averaged $10,017 -- a 1.2 percent decrease from June but a 7.3 percent increase from July 2008. Truck prices were relatively stable overall, though they showed strong increases from last year's depressed levels due to high gasoline prices. Compared to June, SUV prices were in line with the market though pickup truck prices were modestly higher. Car prices fell both sequentially and on a year-over-year basis for almost all segments.

All major seller types showed month/month and year/year price gains, with average prices for vehicles sold in manufacturer sales up 6.5 percent year-over-year, fleet/lease sales prices up 5.5 percent and dealer consignment sales prices up 9.9 percent.

ADESA Analytical Services estimates that auction industry inventory levels stood at approximately 33 days at the end of July compared to 34 days last July. Conversion rates (units sold as a percentage of units offered) remain at levels well above the 60 percent norm, as dealers eagerly grab up available vehicles.

Based on data from CNW Marketing/Research, retail used vehicle sales in July were up on a year-over-year basis by 2.8 percent for franchised dealers, 4 percent for independent dealers and 3.3 percent overall. Certified used vehicle sales in July were down 3.5 percent versus June and down 11.5 percent from last July, based on Autodata figures, as perhaps Cash-for-Clunkers caused some cannibalization of certified sales by new vehicle sales.

 

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