ADESA: Dealers Have More Options with Soft Pricing, NADA: Vehicle Types Most Impacted by Off-Lease December 18, 2015
Kontos_Tom_2014


Off-Lease Volume Slowly Showing its Influence on Used Vehicle Prices

Tom Kontos
Executive VP & Chief Economist
ADESA Analytical Services

Wholesale prices were down in November from October and were essentially flat compared to November 2014. As seen in previous months, that monthly price increase was driven primarily by truck prices. Off-rental units contributed to price gains, but that upward tick can be deceiving given that “conversion rates” (units sold as a percentage of units offered) reached or exceeded asking prices in manufacturer and car rental auction sales. More of the price softness came from the growing off-lease volume in three-year old used vehicles.

Here’s the latest of edition of Kontos Kommentary

Analyst Forecasts about Prices Softening with Used Supply is Taking Root:
Major saving grace continues to be strong retail demand, especially for CPO vehicles.

Soft Pricing Affecting Institutional Consignors More than Dealers:
Dealers have option of retailing vehicles and only wholesaling units which can sell for attractive prices.

November Sales Up 1.1% Over October and Modest 0.1% Over November 2014:
Truck and SUV prices strong relative to car and crossover (CUV) prices year-over-year.
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Banks_Jonathan


NADA UCG Study Explores Role of Leasing in New and Used Vehicle Sales

Jonathan Banks
Executive Automotive Analyst
NADA Used Car Guide

Lease penetration has grown substantially – from 25.7% in 2014 and up nearly 2 percentage points more so far this year to 27.8%, on pace to top 1997’s all-time high of 27.4%. A drastically reduced supply of used vehicles from strong demand and a drop in sales during the recession helped boost used vehicle prices. There’s been a wide gap in retained value over that time – in 2007, averaged retained value for 3-year-old units, typically off-lease vehicles, stood at approximately 45% of equipped new vehicle prices. In 2014, 3-year-old retention hit 54.4%.

Read all about New Vehicle Leasing: Facts, Figures and Future Considerations

Number of New Retail Leases Originating in 2010 Reached 1.75M Units:
Hit 3.48M in 2014, doubling four years earlier and surpassing previous high in 1999.

J.D. Power Estimates Off-Lease Will Grow by 4% to a Total of 2.3M Units:
Off-lease volume this year will pale in comparison to 2015 with 800K units maturing.

Expanding Used Supply Spearheaded by Off-Lease will Compress UC Prices:
Effect will be most pronounced on subcompact and compact cars, and by both non-luxury and luxury compact and midsize utilities.
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