Used Car Prices 'Softening,' ADESA's Kontos Says
February provided "further concrete evidence of softening" of used vehicle prices during a month that usually shows improvement from January, ADESA's Tom Kontos wrote in his monthly Kontos Kommentary.
"Prices uncharacteristically, and unseasonably, softened rather than firmed versus January," said Kontos, executive vice president and chief economist of ADESA Analytical Services. "Prices fell for virtually all model years and all model classes."
Wholesale used vehicle prices in February averaged $10,688, a decline of 2.3% compared to January and an increase of 4.8% relative to a year ago. While almost all model classes declined from January, Kontos said he was encouraged by the slight increase in compact car prices because that segment has been "especially hard-hit by oversupply in recent years."
Kontos noted that the year-over-year growth in minivan prices is exaggerated by newer models as discussed last month.
Average wholesale prices for used vehicles remarketed by manufacturers were down 0.1% month-over-month and down 1.0% year-over-year. Prices for fleet/lease consignors were down 3.4% sequentially but up 3.6% annually. Within this segment, however, rental risk units showed month-on-month and year-on-year price declines. Average prices for dealer consignors were down 1.2% versus January but up 2.5% relative to February 2016.
Based on NADA data, retail used vehicle sales by franchised and independent dealers were down 3.8% month-over-month, but up 6.5% year-over-year. February CPO sales were up 9.8% month-over-month but flat year-over-year, according to figures from Autodata.