NADA: Rainy Days Bring March Madness, ADESA: Off-Rental Played a Big Part April 18, 2014

NADA Report: Dealers Bid Aggressively to Replenish Used Inventory

Jonathan Banks
Senior Director
NADA Used Car Guide

Wholesale prices shot up 3.7% in March, far behind February’s 2.2% increase and NADA Used Car Guide’s 1% forecast for the month. It was the highest rate in three years – caused by dealers having blocked purchases because of harsh weather in January and February, and then bidding aggressively in March to catch up on inventory. Dealers wanted to be ready for the traditional spring selling season’s strong demand. Late model volume continued to fall, adding further buoyancy to the prices.

Read the Guidelines report from NADA Used Car Guide

NADA Used Vehicle Price Index Went Up Over 2 Points to 127.0:
That’s a new all-time high moving far beyond previous mark of 125.6 in November 2013.

Auction Transactions Fell Close to 5% for Compact and Mid-size Cars, Nearly 10% for Mid-size Vans:
Upward price movement at segment level was greatest for all three that also had biggest declines in auction volume.

Large Pickups One of Few Mainstream Segments to Have Sales Increase in March:
But that didn’t keep prices from growing by a 2.7% increase.
Tom Kontos 2014 photo

Kontos Also Sees March Spring Up, but for Another Reason

Tom Kontos
Executive VP & Chief Economist
ADESA Analytical Services

ADESA Analytical Services’ monthly analysis of wholesale prices saw the average climb 6% over February and 4% over March 2013. That passed seasonal and year-ago levels. Off-rental units were in great supply a year ago; delayed off-rental supply created higher off-rental prices and played a role in raising wholesale prices. Retail used vehicle sales also played a significant part with a strong rebound in March. That came after being depressed in previous two months by severe weather conditions.

Here’s the latest Kontos Kommentary market report

Off-rental Volume Should Come Back after Harsh Winter and Late Easter:
That increase, along with expected off-leave volume growth, will return to state of downward price pressure that was seen in recent months.

All Segments Except for Minivans Had Month-Over-Month Increases in March:
Pickups and SUVs saw particularly strong year-over-year price increases.

Dealer Consignors Had 7.5% Price Increase vs. February, and a 4.5% Over March 2013:
That indicated solid wholesale absorption of high trade-in volume from strong March new vehicle sales.
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O'Dell_Shane_NextGear Capital
Uptick in Used Inventory for Dealers

How fran­chised and inde­pen­dent deal­ers have been stay­ing com­pet­i­tive in man­ag­ing inven­tory while meet­ing con­sumer demand.

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How Promising a Price Sells Cars

To under­stand how part­ner­ing with the dealer can actu­ally work, see how Edmunds has sought to set car pric­ing with the dealer by giv­ing con­sumers a cer­tifi­cate they can take to the show­room floor to close the purchase.

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