Wholesale prices see boost over year-ago levels.

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Author: Sawyers, Arlena

Stronger sales and tighter supplies helped boost the average wholesale price of used vehicles in April over year-ago levels.

Last month's average wholesale price of $9,339 was 3.3 percent higher than the average used-vehicle price of $9,037 in April 2003, according to ADESA Corp.

Still, retail used-vehicle prices remain at historic lows relative to new-vehicle prices, ADESA says. That makes used cars and trucks attractive options for consumers, says Tom Kontos, ADESA's vice president of industry relations and analytical services.

The average wholesale price of used cars in April was $8,206 up 3.2 percent from the April 2003 average price of $7,951. Traditional and sporty cars showed the strongest year-over-year gains, up 7.9 percent and 5.2 percent, respectively.

The average wholesale price of light trucks last month was $10,783, up 5 percent from the year-ago average price of $10,272. The average price of full-sized pickups gained 5.6 percent from last year, while the average price of minivans fell 3.2 percent.

Manheim, whose monthly index measures wholesale price changes, also reports that used-vehicle prices strengthened in April.

Tom Webb, Manheim's chief economist, says prices are shoring up because fewer used vehicles are available. About 500,000 fewer vehicles are expected to come off-lease this year because many lessors wrote fewer leases starting in 2000 or got out of the business, Webb says. Many of those leases are maturing now.

There also was a more orderly flow of retired rental vehicles in April. Webb says several domestic automakers sold large numbers of vehicles to rental car companies in late 2002 to help keep their factories open.

Because rental companies did not expand their fleets, the new vehicles cycled through the fleets more rapidly, remaining in service for four to six months instead of the more traditional nine to 12 months. Those vehicles hit the used-car market in spring 2003, helping to depress prices last year, Webb says.

Legend for Chart:
A - Average price April 2004
B - Average price March 2004
C - Average price April 2003
D - Percent change vs. March 2004
E - Percent change vs. April 2003
Average wholesale used-vehicle prices, April & 4 months
                                  A             B             C
                                  D             E
Cars
Small and mid-range          $7,112        $7,104        $6,880
                                0.1           3.4
Sporty                       12,116        11,867        11,513
                                2.1           5.2
Traditional                   8,731         8,442         8,091
                                3.4           7.9
Upscale                      14,286        14,283        14,510
                                0.0          -1.5
Total car                     8,206         8,189         7,951
                                0.2           3.2
Light trucks
Small pickups                 7,081         7,112         7,242
                               -0.4          -2.2
Full-sized pickups           11,617        11,668        10,998
                               -0.4           5.6
Minivans                      7,523         8,104         7,775
                               -7.2          -3.2
Full-sized vans               6,962         7,407         6,673
                               -6.0           4.3
Lower mid-range SUVs         10,482        10,694        10,184
                               -2.0           2.9
Large SUVs                   15,720        16,044        15,406
                               -2.0           2.0
Other SUVs[*]                15,493        15,517        14,800
                               -0.2           4.7
Total light truck            10,783        10,947        10,272
                               -1.5           5.0
TOTAL LIGHT-VEHICLE
AVERAGE                       9,339         9,415         9,037
                               -0.8           3.3
Note Based on approximately a half million AuctionNet wholesale
vehicle transactions per month
* Includes standard and premium sport wagons and small upper
mid-range and premium SUVs
Source ADESA Analytical Services based on AuctionNet data and
Automotive News market classifications

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By Arlena Sawyers