Kontos: Price Softening May Have Started, Webb: Market Sees Strong Second Half January 15, 2016

Year Ends with Softening of Wholesale Used Vehicle Prices

Tom Kontos
Executive VP & Chief Economist
ADESA Analytical Services

Softening of used wholesale prices caused by the growling supply was offset last year by strong demand for retail used vehicles and CPOs, moderate new vehicle incentives, and the embrace of upstream channels along with traditional auctions. Off-rental program vehicles surged in supply in the first half of 2015, but these high-dollar, late model units biased the market for much of the year. Supply had increased enough to bring down prices at least 1% from both November and December 2014.

Check out the latest edition of Kontos Kommentary

ADESA Average at $9,763 – down 1.2% from November and 1% from Year Ago:
Minivans only segment to see increase, and trucks declined less than cars and crossovers.

Off-Rental Risk Units Saw Modest M-O-M and Y-O-Y Price Increases:
Three-model-year-old (usually off-lease) vehicles down significantly M-O-M and Y-O-Y.

Franchised Dealers Had 6.4% Y-O-Y Increase in Used Sales During December:
Independent dealers had 11.7% Y-O-Y increase in used sales that same month.

Manheim Index Sees Most Stable Wholesale Price Stability in its History

Tom Webb
Chief Economist
Cox Automotive

The Manheim Used Vehicle Value Index saw strong used vehicle values in the fourth quarter of 2015, marking the longest stretch of wholesale price stability since the Index started. On an average annual basis, the Index rose 1.2% in 2015, saw a 2014 increase of 1.5%, and a decline of 1% in 2012 and 1.8% in 2013. That was the longest stretch of wholesale price stability with price movements of less than 2% in the Index’s 20-year history.

See Manheim Publications, White Papers, and Blog Entries

Wholesale Prices Increased in December, Marking 6th Increase in Previous 7 Months:
Index up 1.5% from a year ago, and reached its highest level in more than four years.

Compact Car Prices Down 7.2% in December from Year Ago:
Fierce competition in new market and shifting consumer preferences behind drop.

Pick-ups Increased 11.8% and Vans Were Up 6.2% in Pricing from Year Ago:
Higher pricing in new truck market and low gas and diesel prices contributed to it.
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Banks_Jonathan in NADA UCG for Dec 2015
December 2015 Used Vehicle Industry Update

Here’s the Decem­ber report from Jonathan Banks, exec­u­tive ana­lyst for NADA Used Car Guide.

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