Current Used Vehicle Market Conditions: Q2 2024

July 29, 2024

3 MIN READ

May/June 2024 Kontos Kommentary

The following commentary is produced by Tom Kontos, Chief Economist, ADESA Auctions.

Wholesale prices fell for the second consecutive month in May and continued to fall into mid-June, as the less-than-impressive 2024 Spring/tax season market came to an early close. Nevertheless, wholesale and retail used vehicle market conditions are amenable to a less dramatic ongoing decline in prices than seen last year, as much of the correction to historical patterns of depreciation, seasonality and price-spread versus new vehicles has already taken place.

Wholesale Market Trends*

According to ADESA US Analytical Services’ monthly analysis of auction industry used vehicle prices by vehicle model class, wholesale prices in May averaged $14,329—down 1.6% compared to April, down 11.1% relative to May 2023, and up 23.4% versus pre-pandemic/May 2019, as shown below.

Wholesale Market Trend

The biggest month-over-month drops were in the popular compact SUV/CUV and compact car classes, perhaps indicating lessening dealer need for such units as the Spring market ends. Overall average prices have further declined in June and stood at $14,122 for the week ending June 16.

Further insights on wholesale price trends can be gained by holding constant for auction sale type, model-year age and mileage (the upper line in the following graph, which represents “Late-Model” units), as well as price trends for all vehicles sold (the lower line in the graph below).

Wholesale Market Trend

As the graph indicates, average prices for “Late-Model” used vehicles as defined here showed continued strength in May as opposed to the drop in overall prices. However, average prices for these late-model vehicles have softened in June and stood at $24,854 for the week ending June 16.

A with historical data broken out by model class for the table and graph in this section has been provided with this report for your convenience in tracking these trends.

Retail Market Trends

The following graph and table summarize ADESA US Analytical Services’ analysis of NADA and Motor Intelligence data, respectively, on retail used vehicle and certified pre-owned (CPO) sales in May.

Wholesale Market Trend

As the figures show, year-to-date retail used vehicle sales are now 0.9% below year-ago levels, and 14.5% below pre-pandemic levels. CPO sales have registered a slight year-over-year increase and now represent one out of five in franchised dealer used vehicle sales, as consumers seek affordability and value.

*Source: Analysis in this section is based on over six million annual sales transactions from over 250 of the largest U.S. wholesale auto auctions, including those of ADESA US as well as other auction companies. ADESA US Analytical Services segregates these transactions to study trends by vehicle model class, sale type, mode-year, etc.

Disclaimer: The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to ADESA US. The views and analysis are not the views of ADESA US, its management, its subsidiaries or its parent companies; and their accuracy is not warranted.

Forward-Looking Statements: The statements contained in this report and statements that ADESA US, its management, its subsidiaries or its parent companies may make orally in connection with this report that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry and business) may be forward-looking statements. Words such as “could,” “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “promises,” “likely to,” “outlook,” “potential,” “project” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the “Risk Factors” identified in Carvana Co.’s Securities and Exchange Commission filings. Neither ADESA US nor its subsidiaries or parent companies undertakes any obligation to update any forward-looking statements.

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