The average wholesale price of large used SUVs rose slightly last month, as gasoline prices moderated and the Big 3's employee discount programs for new vehicles ended. But it remained well below the year-ago price.
Large SUVs sold at auction in October for an average price of $12,486, ADESA Analytical Services reports. That was a 2.0 percent increase from September 2005, but a 9.0 percent drop from October 2004.
Overall, the average price of used vehicles in October was $9,362. ADESA says. That price was 2.9 percent higher than the previous month's and 5.3 percent higher than the year ago-price.
Tom Webb, chief economist for the Manheim auction company, said automakers helped boost used-vehicle prices by emphasizing value pricing instead of increased incentives for new vehicles.
Narrower margins pushed franchised dealers to cut their grosses to sell new cars and trucks, he said.
"To dealers and their sales staff, this meant a strong shift in favor of selling used vehicles, not new ones," Webb said in an online commentary.
Tom Kontos, vice president of analytical services at ADESA, told Automotive News that the small price increase for large used SUVs occurred mainly because the market adjusted to steep price declines for those vehicles in the summer and early fall.
Higher prices for used vehicles may not carry into this month, Kontos said.
The new round of new-vehicle incentives the Big 3 announced in mid-November likely will put pressure on used-vehicle prices, he said.
Retail used-vehicle sales, especially by independent dealers, must increase for prices to continue to rise, Kontos added. He says he sees no indication that is happening.
"Typically, the November average price is about a percentage point lower than the average price in October," Kontos said.
"I don't expect November's price year over year to be as strong as the 5.3 percent we saw in October."