Used vehicle values continued to soften in May. Supply is still low compared to historical norms, but prices on used vehicles were increasing to new car levels, but in our opinion, that is unsustainable. When a consumer can purchase a new vehicle for about the same monthly payment as a used vehicle, they usually opt for new.

F-150s and surprisingly, F-350s were frequently hit units on various internet shopping sites. The F-150 is not a surprise; it is a consistently popular unit. But the F-350 is not a frequently queried vehicle. The interest in a heavy-duty, work-type pick-up can be taken as evidence of the economic recovery, despite the fact that the construction sector lost jobs during May.

At auction, prices and volume were down in general, and bidding was described as “cautious”. Demand was muted in comparison to the last several months, and dealers were bidding only on the units they needed and not speculating on the others.

The May unemployment numbers won’t do a lot to boost consumer confidence, but I was pleasantly surprised to see several “Now Hiring” signs on a recent road trip through the South. Something I hadn’t seen in more than a year. My thinking is that we’ll continue the slow recovery as opposed to a double-dip recession.

Sales Results:

Vehicle volume was light in May, consistent with the market as a whole and not unusual for this time of year. Our average clean unit sold at auction was a 2007 model with 74,005 miles and $810 in estimated damages, and sold for $10,341, virtually the same price and miles as April, 2010.

Across all US consignments, the average unit sold was a 2006 with 89,745 miles and $1257 in damages.  That unit commanded a price of $9571, up about $90 from last month. However, April’s average unit had about 6000 more miles. The market prices as a whole continue to soften seasonally.

Utilities (Pick-ups and Vans) made up about 36% of our sales. This segment performed the strongest in terms of retention dollars against NAI. Clean Utilities brought 101.07% of NAI during May.

Sedans comprised 43% of our total sales. Clean units in this segment returned 99.97% of NAI.

SUV’s accounted for 21% of sales. An average clean SUV returned 99.12% of NAI.

Utilities and Pick-ups returning the highest dollars (but not by a big margin) confirms the expectations of a continued slow and non-dramatic recovery. These vehicles are basically tools necessary to do a job.

SUVs having the lowest return (again, not by a big margin) reflects the market’s awareness of rising fuel costs, carbon foot print, and the resultant desire to select the smallest most fuel efficient vehicle that will get the job done.