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Kontos: Used-Vehicle Prices Soften 'Uncharacteristically' in February

March 22, 2017

CARMEL, Ind. — February provided “further concrete evidence of softening” of used-vehicle prices, ADESA's Tom Kontos wrote in his monthly Kontos Kommentary. He pointed out that prices didn’t rebound like they typically do after a soft January.

"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% compared 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.

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% vs. January but up 2.5% relative to February 2016.

Based on data from the National Automobile Dealers Association, retail used-vehicle sales by franchised and independent dealers were down 3.8% month over month but up 6.5% on a year-over-year basis.  February CPO sales were up 9.8% month over month but flat year over year, according to figures from Autodata.

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