After five consecutive months of gains, used-vehicle prices leveled off in April and were down from the April 2008 level, ADESA Auctions says.
The average wholesale price of used cars and trucks in April was $9,843. That was down 0.4 percent from the average price in March and down 1.6 percent from the average in April 2008, ADESA reports.
"This hiatus in wholesale used-vehicle price growth is a welcome respite for dealers looking to maintain gross margins and used-vehicle sales in tough economic times," says Tom Kontos, ADESA executive vice president of customer strategies and analytics.
Because prices of large SUVs collapsed last spring when gasoline prices soared, that segment is showing significant price increases from year-earlier levels. The average price of large SUVs in April was $13,147, up 10.2 percent from the average price in April 2008 and up 0.6 percent from March.
Conversely, small and midrange cars, which experienced big price increases last spring, had sharply lower prices last month compared with April 2008.
Small and midrange cars had an average price of $8,048 in April, down 4.9 percent from a year earlier and down 1.1 percent from March.
Manheim's Used Vehicle Value Index stood at 106.6 in April, compared with 106.1 in the previous month and 108.4 in April 2008. The index measures monthly changes in used-vehicle prices and is adjusted for model, mileage and time of year.
Tom Webb, Manheim's chief economist, says poor new-vehicle sales create serious financial problems for dealers, threatening their ability to buy and sell new and used vehicles.
"The stability in the used-vehicle market appears to be more 'despite' rather than 'because of' the weakness in the new-vehicle market," Webb says.
Although the number of retired rental vehicles owned by manufacturers -- also known as program cars -- entering auctions was down by one-third in April, their prices were flat compared with April 2008, Webb says.
That's because "they were competing against new vehicles," he says, "and there was some pretty good discounting occurring on the new-vehicle side."