Fall Used Vehicle Market Report for Credit Unions
by: Layne Weber, VP National Remarketing Sales, OneMain Remarketing
Two trends are evident as the fall season transitions into winter for wholesale used vehicle sales. First, prices, though still near historic high levels, have softened considerably and second; available supply, especially at auctions is beginning to increase. Recent reports from several industry sources all support these two trends and predict a continued increase in supply along with continued declines in average sale prices likely for the next few months.
Tom Kontos from Adesa Analytical Services reported that average auction sale prices were flat in September, down slightly from August but noted prices were 2% below the 2011 averages. He indicated the September results could be a sign of stability in the market as previous months saw steeper declines. Specific segments of inventory have softened considerably compared to 2011 with Luxury Cars down nearly 6%, the Truck segment down more than 3% and Midsize SUV’s down more than 11%. The strongest vehicle class compared to last year is Full Size Cars which are up more than 5%.
Ricky Beggs from BlackBook noted that overall prices have trended downward for the past several weeks and indicated that the current market conditions are similar to the market conditions at the same time last year. BlackBook has indicated an overall decline in average sales prices for nearly every week in the third quarter of 2012.
Tom Webb from Manheim Consulting indicated that the Manheim Market Index was virtually unchanged in September as compared to August results but the returns were down 1.8% from the previous year. He also commented that the 3rd quarter of 2012 had the steepest one quarter price drop since the end of 2008 with average prices, during the quarter, down 3.4% year over year. Webb stated that the price drop last quarter was a “continued healthy market realignment that will leave us in a better place with prices still high but not disruptively so”.
Auctions across the country are beginning to see an increase in volume from several consigners and expect more cars to be offered for sale in the 4th quarter. The trend for increased volume is projected to continue into 2013 with possible increase in lease returns, rental vehicles, and various types of units from manufacturers. Credit Unions can still take advantage of used vehicle prices that are near historical high levels when selling repossession assets but should temper their expectations to align with existing market conditions.
This article is provided by Layne Weber. Layne is a 20 year industry veteran and currently serves as VP – National Remarketing Sales for OneMain Remarketing, an industry leading provider of used vehicle remarketing services for credit unions, banks, and other financial institutions. www.onemainremarketing.com
