Two steps forward, one step back. Or maybe just to the side.
Upstream and downstream actions have collided to result in whole prices treading water.
KAR Auction Services chief economist Tom Kontos recently released interesting numbers comparing February wholesale prices in 2019 with those of the previous month as well as prices from a year ago. The numbers – pulled in from ADESA Analytical Services’ monthly analysis – compares cars and trucks both overall and broken down by class.
In February of 2019, the overall wholesale prices for all used vehicles averaged $10,775. This represented an increase of 0.1% from the previous months, and an 0.6% increase from February of 2018. Looking more closely at the data, Kontos notes that car segment prices were down month to month while the opposite was true when comparing trucks.
“Average wholesale prices were relatively flat in February, as opposing forces largely canceled each other out,” he said in the February edition of his YouTube series Kontos Kommentary.
“To be more specific, overall car price declines were more than offset by truck price gains, and off-lease price strength was largely offset by softer prices elsewhere,” Kontos continued. “Within the off-lease segment, the ‘take-rate’ of midsize cars purchased upstream may be higher than that of midsize SUV/crossovers, which is leaving fewer late-model midsize cars in the lanes and an abundance of midsize SUV/crossovers. […] A possible explanation for the strength of off-lease midsize car prices is that more off-lease cars are being bought upstream in online-only sales from dealer lots and marshalling yards. So, auctions may be seeing a relative scarcity of late-model midsize cars.”
Other issues of notes in the Kontos commentary include:
You can catch Tom’s full commentary on February wholesale prices via his YouTube series, Kontos Kommentary.