Auto Physical Damage

Current Used Vehicle Market Conditions: Q3 2022

December 6, 2022

September/October 2022 Kontos Kommentary

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


Average wholesale used vehicle prices in September were down for the fourth month in a row from their spring/tax-refund seasonal peaks in May, but at a more gradual pace than that seen in the three prior months. Hurricane Ian possibly had a moderating effect on wholesale price deterioration, due to the loss of used vehicle supply and the resulting replacement demand the storm generated. This moderating trend continued into October.

Lack of affordability and availability are hampering used vehicle retail sales, leaving dealers with more inventories, and prompting them to be more selective in their inventory sourcing. This is also evidenced by lower conversion rates at auction. 

Wholesale Market Trends

According to ADESA US Analytical Services’ monthly analysis of auction industry used vehicle prices by vehicle model class, wholesale prices in September averaged $15,543—down 1.3% compared to August, flat relative to September 2021, and up 39.3% versus pre-pandemic/September 2019, as seen below.

Wholesale Market Trend

Average prices continued to soften in October and stood at $15,282 for the week ending October 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), as well as price trends for all vehicles sold (the lower line in the graph below). Prices continued to fall for both groups from their spring/tax-refund seasonal peaks, although the drop for the late-model units shown in the top line has been more precipitous. 


A spreadsheet 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 going forward.

Retail Market Trends

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


Kontos_YTD_US_Q1_22@1966 copy

As the graph shows, September and year-to-date retail used vehicle sales were down by double-digits versus 2021 and 2019. The table also shows CPO sales, which similarly showed double-digit year-to-date declines compared to last year and pre-pandemic/2019. Average auction conversion rates have fallen to under 60% as a result of slow retail sales, as dealers become more selective when adding to their inventories. 

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.