Kontos: Wholesale Prices Dropping Featured

By Staff Writer February 03, 2020

Wholesale prices over the past seven months may reflect used-car market ‘fatigue,’ reported Tom Kontos, chief economist for KAR Global, in his December 2019 Kontos Kommentary.

Kontos, in his report, stated, “(Last year) ended with average wholesale prices dropping for the seventh month in a row.  Though some of this decline reflects seasonal patterns, it may also be indicative of used vehicle market ‘fatigue’ after many months of admirably withstanding used vehicle supply growth without significant deterioration in values.”

According to KAR Global Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale prices in December averaged $10,822 – down 0.9 percent compared to November but up 1.9 percent relative to December 2018.

Car segments were down while truck segments were up on a month-over-month basis. Prices on compact SUV/crossover units “appear to be softening after several years of strong new vehicle sales and model proliferation,” Kontos reported.

When holding constant for sale type, model-year-age, mileage, and model class segment - using criteria that characterize off-lease units - prices were up on a year-over-year basis for midsize cars and midsize SUV/CUVs, he said.

Prices for midsize cars again outperformed SUVs/crossovers in year-over-year growth.

“Average wholesale prices for used vehicles remarketed by manufacturers were down 2.3 percent month-over-month but up 7.4 percent year-over-year,” Kontos said.  “Prices for fleet/lease consignors were up 1.2 percent sequentially and up 4.6 percent annually.  Average prices for dealer consignors were up 0.3 percent versus November and were flat relative to December 2018.”

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Last modified on Friday, 07 February 2020 14:53

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