Latest auction data has cars & trucks depreciating at same rate


With some upbeat signs in the lanes that dealers are preparing to move used metal as the summer heats up, the Black Book Market Insights report showed car and truck segments depreciating at the same level.

Editors determined that both overall segments softened by 0.25 percent last week. They also mentioned compact vans performed the best, increasing their value by 0.07 percent, while sporty cars saw no price declines during the week.

“Overall, the wholesale markets performed well last week. Weaker spots were seen in the sub-compact crossover and compact crossover/SUV segments,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.

As mentioned, volume-weighted data showed overall car segment values decreased by 0.25 percent last week, lower than the average weekly decrease of 0.39 percent in values over the previous four weeks.

Black Book pointed out that prestige luxury car, midsize car and full-size car segments declined the most by 0.52 percent, 0.45 percent and 0.42 percent, respectively.

On the truck side, again, the volume-weighted information showed the overall segment values (including pickups, SUVs and vans) dipped by 0.25 percent last week, higher than the average weekly decrease of 0.18 percent in values over the previous four weeks.

As Goyal alluded to, sub-compact crossover, sub-compact luxury crossover and compact crossover/SUV decreased the most by 0.51 percent, 0.47 percent and 0.44 percent, respectively.

Turning next to Black Book’s representatives in the lanes, one of the most interesting anecdotes came from Pennsylvania.

“Was an OK sale here today. It was worth noting that most of the buyers were online and not in attendance,” Black Book’s auction watcher in the Keystone State said.

Sticking in the Northeast, the lane watcher in Massachusetts recapped, “Today’s auction was better than last week and prices were stable.”

Sliding over to the Midwest, the report out of Wisconsin noted, “Dealers were cherry picking today.” But in Indiana, the action was a little bit livelier.

“A good sale today but consignment was down again, which helped keep the values up. Dealers here are buying in order to have inventory for what is expected to be a decent summer market,” the Black Book representative stationed in the Hoosier State said.

Down in Texas, the scene was, “Prices are holding steady here as bidding was good, as was the number of consigned vehicles.”

Wrapping up the auction action roundup, Black Book’s observer in Florida added, “The commercial lanes did better today. The dealer lanes struggled with lots of no-sales.”

NAAA hosts mock auction on Capitol Hill


The National Auto Auction Association held a mock auction on Capitol Hill to interactively educate policymakers about the wholesale auction business and the role it plays in both the auto industry and the U.S. economy.

Staffers and legislative aides of the Senate Automotive Caucus joined NAAA in the Russell Senate Office Building on June 16, where NAAA first presented a 30-minute video depicting the entire auction process, such as vehicles arriving via transport truck, inspection, check-in, repair, painting and reconditioning and sales day bidding.

For the mock auction, NAAA brought its audience an auctioneer, eight colorful quarter-scale cutouts of vehicles and stacks of ‘NAAA bucks.’

"We call it 'Wholesale Auto Auctions 101' because we want to give our lawmakers a solid understanding of how auctions operate and how integral they are to the industry," NAAA operations manager and legislative director Tricia Heon said in a news release. "Promoting and protecting the interests of our members and the industry requires proactively educating as well as advocating."

Senate Automotive Caucus chairman Sen. Rob Portman of Ohio arranged the meeting with NAAA.

The caucus provides a bipartisan forum for senators to exchange ideas and influence policy concerning issues that impact the auto industry, according to NAAA.

In attendance were staff from the offices of Sen. Sherrod Brown of Ohio, Sen. Joe Donnelly of Indiana, Sen. Al Franken of Minnesota, Sen. Patty Murray of Washington, Sen. James Risch of Idaho, and Sen. Luther Strange of Alabama.

U.S. Rep. Pat Tiberi of Ohio and chairman of the congressional Joint Economic Committee also sent representatives.

Following the mock auction, NAAA hosted a reception where staff had an opportunity to meet with NAAA members such as Independent Auction Group co-chair Charlotte Pyle and members from ADESA and Cox Automotive.

ADESA’s Paul Lips, Heather Greenawald, Elizabeth Murphy and NAAA President-elect Warren Clauss participated. And Cox Automotive members in attendance included Craig Amelung and Karyn Wrye.

"I was impressed with the genuine interest and enthusiasm shown by those who attended as well as by the support of the auto caucus," said Pyle, who served as ringman for the mock auction’s auctioneer John Nicholls. "It's rewarding to educate our lawmakers in Washington about our business."

Nicholls is the 2015 NAAA Auctioneer of the Year and president of the Nicholls Auction Marketing Group.

NAAA chief executive officer Frank Hackett, along with Heon and Sante Esposito, president of lobbying firm Key Advocates accompanied the NAAA member delegation for the Capitol Hill visit.

"We received a lot of positive back about our program and about returning to do another in the future," Hackett said.

Dealer consignment & small-car price movements highlight latest Black Book update


With dealer consignment activity softening for a variety of reasons, the newest Black Book Market Insights report showed that small cars continue to feel heavy depreciation.

And editors added that small crossovers are also sustaining larger valuation drops, as well.

Out of all vehicle categories within the car segment, the report indicated sub-compact cars declined the most, dropping by 0.68 percent.

“The smallest vehicles, including sub-compact car, sub-compact crossover and sub-compact luxury crossover, have experienced heavier depreciation levels as gas prices remain low,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.

Reviewing volume-weighted data, Black Book found that overall car segment values decreased by 0.35 percent last week, slightly lower than the average weekly decrease of 0.39 percent in values over the previous four weeks.

As Goyal referenced, sub-compact car, mid-size car, prestige luxury car and compact car segments declined the most by 0.68 percent, 0.53 percent, 0.50 percent and 0.48 percent, respectively.

Looking again at volume-weighted information, Black Book determined overall truck segment values — including pickup, SUVs and vans — dipped by 0.23 percent last week, similar to the average weekly decrease of 0.24 percent in values recorded during the previous four weeks.

Editors mentioned sub-compact luxury crossover and compact van were the worst performing truck segments, while pickup trucks values remained flat last week.

Turning next to what Black Book gathered from its representatives in the lanes, it seemed the talk at auctions revolved around dealer consignment.

The dialogue began out West with a lane watcher in Washington noting, “A new-car dealer says that they are keeping most of their trade-in inventory if the vehicles meet some minimal requirements.”

Sliding into the Midwest, a similar story appeared in Indiana as Black Book’s representative reported, “Consignment is still down here. with more buyers than sellers at the auction. The really nice, clean vehicles remain scarce.”

And the topic of dealer consignment percolated in Georgia, too, with the auction observer noting, “The trend of softer values is continuing here. No-sales were higher in the dealer-consigned lanes and the vehicles that did sell had low prices.”

The three other reports Black Book received from its staff in the field touched on a wide array of themes, and they came from various parts of the country, too.

From California: “The market appears to be cooling down. No-sales were more prominent today.”

From Pennsylvania: “A dealer said he is buying in the $8,000 to $15,000 price range with no real concern about the year model of the vehicles. Decent trucks are going to be much older at that price point.”

And out of Texas: “A wholesaler said that he is struggling to find 3- to 5-year-old units with low mileage.”

May prices off nearly 2%; similar expectations for June

McLEAN, Va. - 

Analysts at J.D. Power Valuation Services found that May wholesale prices for used vehicles up to 8 years old declined by an average of 1.9 percent.

And their expectations predict a similar softening to happen in June, as well.

According to the June edition of Used Car and Light Truck Guidelines Industry Update, J.D. Power Valuation Services explained that the May price decline ended up being slightly better than the way the month has historically performed during the past 20 years.

“In spite of this glimmer of positivity, the 31-day period underperformed J.D. Power Valuation Services’ expectations for the month,” analysts said in the report. “It appears there has been no payback for February’s abnormally weak performance.”

Should analysts’ June forecast hold true, the report indicated that only a 1.9 percent price softening would be an improvement compared to June of last year.

“At the segment level, mainstream losses are expected to be fairly consistent with the exception of midsize and large pickups, which continue to perform very strongly and are forecast to perform significantly better than the industry average,” the report said.

“Losses for all premium segment are forecast to fall around the industry average,” the report continued.

In terms of full-year expectations, J.D. Power Valuation Services — formerly NADA Used Car Guide — maintained that used-vehicle prices should fall by about 6 percent, which would be 2 percentage points more than the 4 percent drop recorded a year ago.

“Ongoing increase in supply, higher incentives and normalizing retail environment — including credit conditions — will ultimately dictate losses,” analysts said.

More details about May movements

In lieu of a mitigated February federal tax season bounce back, J.D. Power Valuation Services’ seasonally adjusted used vehicle price index managed to increase for the first time in a year, ticking up by 0.8 percent to 111.1.

The May index reading settled 7.6 percent below the year-ago measurement of 120.2.

At the segment level, analysts explained in the report that mainstream segment losses were led by what they deemed to be a “usual suspect,” midsize cars. Prices for these units decreased by 2.6 percent.

The report indicated prices were “weak” for all midsize models, but especially the Nissan Altima, which sustained a 4-percent price decline.

“Additionally, late model year Altima volume accounted for 20 percent of all midsize car volume over the past few months, which has helped keep prices for the group depressed,” analysts said.

Like their sedan counterparts, the report mentioned that midsize van values also softened as prices fell by 2 percent. Analysts attributed that movement to a 70-percent increase in 2017 model year volume, which was traced back to an “elevated” number of Kia Sedona units returning to the marketplace.

Meanwhile on the opposite end of the spectrum, the report pointed out that midsize pickups continue to perform “exceptionally well” despite a 37-percent year-to-date increase in late-model volume.

On the luxury side of the market, J.D. Power Valuation Services mentioned that luxury midsize car prices dropped by 2.6 percent in May, following what the firm called a “strong April showing.”

Prices for luxury large utilities fell by 2.1 percent, which turned out to be the worst May for that segment since 2012, according to the report that also mentioned the decrease came in part because of a “sharp” 8 percent increase in month-over-month auction volume.

When asked about May's 1.9 percent price drop, David Paris, executive analyst at J.D. Power Valuation Services said in separate news release, “It’s normal to see a drop the fifth month of the year. However, this May was a little different since the decline slightly outperformed what we've seen during the month the past 20 years.”

Paris went on to say, “While the index may have increased by 0.8 percent during May, it was 7.6 percent below May of last year. That said, we expect wholesale prices of 8-year-old or younger vehicles to drop about 1.9 percent during June. We still expect prices to decline by about 6 percent for the year as a whole.”

May wholesale volume dips 3%

McLEAN, Va. - 

Compared to the previous four-week period, J.D. Power Valuation Services determined auction sales volume for used vehicles up to 8 years old dropped by 3 percent in May, settling at 366,212 units.

According to the June edition of Used Car and Light Truck Guidelines Industry Update, J.D. Power Valuation Services recapped that the volume figure for the same month last year came in at 360,394 units.

Analysts determined that late-model vehicle volume — units up to 3 years old — ended up flat in May versus the previous month as they put the figure at 210,426 units. Through the first five months of the year, late-model vehicle volume sits at 1,235,897 units. The report puts the increase for this metric at 7 percent, as the year-to-date sum a year ago was 1,158,234.

At the segment level, analysts from J.D. Power Valuation Services — formerly NADA Used Car Guide — noted that late-model compact car volume rose 6 percent month-over-month in May while large pickup and midsize car volume grew by 2 percent and 1 percent, respectively.

Subcompact car volume softened by 3 percent, according to the report, which also mentioned midsize pickup and midsize van volume dropped by 4 percent and 10 percent, respectively.

KAR’s new analysis again shows ‘significant price softening’

CARMEL, Ind. - 

KAR Auction Services chief economist Tom Kontos reported overall wholesale prices in May rose nearly 4 percent year-over-year. But a recent addition to Kontos’ analysis in order to give the industry a better understanding “once again shows significant price softening.”

According to ADESA Analytical Services’ monthly analysis of wholesale used vehicle prices by vehicle model class, wholesale used vehicle prices in May averaged $11,138. The May figure ended up flat compared to April but 3.9 percent relative to May of last year.

Kontos explained that the year-over-year rise came mostly from larger vehicles, including full-size cars, midsize and full-size SUVs/CUVs and full-size pickups. He also pointed out that the year-over-year growth in minivan prices is exaggerated by newer models as discussed in January’s Kontos Kommentary.

“Average wholesale prices in May were flat versus April but up on a year-over-year basis, primarily due to the strength of truck prices and a younger mix resulting from off-lease supply growth,” Kontos said.

“As introduced last month, a drill-down into the data clearly reveals price softening when accounting for sale type and vehicle age, model class and mileage,” he continued.

Kontos again took a look at fleet/lease sales of 3-year-old vehicles with 36,000 to 45,000 miles. He found that May prices for midsize SUVs and CUVs softened by $225 or 1.1 percent year-over-year to settle at $20,225.

The drop-off for midsize cars in this analysis was even steeper as May prices softened by $685 or 5.6 percent to fall below $12,000, landing at $11,595.

“We will continue to monitor and report this information as a supplement to the averages traditionally provided here,” Kontos said while also elaborating in an as well as at the top of this page.

Elsewhere, Kontos mentioned that average wholesale prices for used vehicles remarketed by manufacturers in May rose 3.3 percent month-over-month and up 4.9 percent year-over-year.  Overall May prices for fleet/lease consignors ticked down 0.2 percent sequentially but rose 3.5 percent annually.

Kontos added that average prices for dealer consignors were up 0.2 percent versus April and up 5.9 percent relative to May of last year.

Kontos closed by mentioning data from the National Automobile Dealers Association that indicated May retail used vehicle sales by franchised and independent dealers were down a combined 2.8 percent year-over-year. As also reported by AuSM, May certified pre-owned sales climbed 7.0 percent year-over-year, according to figures from Autodata.

ADESA Wholesale Used-Vehicle Price Trends
   Average  Price  ($/Unit)  Latest  Month Versus
   May 2017  April 2017  May 2016  Prior Month  Prior Year
 Total All Vehicles  $11,138  $11,141  $10,718  0.0%  3.9%
 Total Cars  $8,954  $8,968  $8,952  -0.2%  0.0%
 Compact Car  $6,832  $6,805  $6,835  0.4%  0.0%
 Midsize Car  $7,970  $7,962  $8,045  0.1%  -0.9%
 Full-size Car  $8,395  $8,504  $7,864  -1.3%  6.8%
 Luxury Car  $13,765  $13,317  $13,740  3.4%  0.2%
 Sporty Car  $14,313  $14,694  $14,207  -2.6%  0.7%
 Total Trucks  $13,244  $13,187  $12,673  0.4%  4.5%
 Minivan  $9,117  $9,060  $7,932  0.6%  14.9%
 Full-size Van  $13,005  $13,009  $13,457  0.0%  -3.4%
 Compact SUV/CUV  $10,888  $11,083  $10,851  -1.8%  0.3%
 Midsize SUV/CUV  $11,845  $11,773  $11,484  0.6%  3.1%
 Full-size SUV/CUV  $14,075  $14,085  $13,502  -0.1%  4.2%
 Luxury SUV/CUV  $19,312  $19,055  $19,175  1.3%  0.7%
 Compact Pickup  $9,367  $9,326  $9,283  0.4%  0.9%
 Full-size Pickup  $16,775  $16,520  $15,857  1.5%  5.8%

Source: ADESA Analytical Services.

IAA to open 16th Texas branch


Insurance Auto Auctions has begun constructing IAA Fort Worth North, the company’s upcoming new branch scheduled to open in November.

The new 18,000-square-fot branch will sit on 200 acres north of the Dallas-Fort Worth area, complementing IAA branches in Grand Prairie and Wilmer, IAA said.

IAA Fort Worth North will include office, run and drive and warehouse space.

"The office space will include multiple conference rooms and offices that will be available for IAA's insurance customers to use for training claims adjusters on site," IAA explained in a news release announcing the opening.

Additionally, the new branch will incorporate enhanced sustainability practices, such as using both recycled asphalt and concrete for resurfacing and collecting water for landscaping, according to IAA.

"This expansion will provide the flexibility to respond to the growing inventory needs of current and future customers as well as offer a wider vehicle selection for buyers," IAA chief executive officer and president John Kett said. "The location will also ensure critical reserve capacity for catastrophic events."

IAA Fort Worth North is located at 11863 Harmonson Road. and when it opens for business, weekly auctions will be held on Tuesdays at 9:00 a.m.

Truck prices stay strong as dealers seek clean units


As lane watchers noticed dealers intensify their search for clean or better units, the latest Black Book Market Insights report showed truck segments continuing to out-perform their car counterparts.

Ironically out of all segments — and perhaps a nod to the first official day of summer coming in a few days — editors found that the sporty cars increased their value the most.

“Midsize cars continued to depreciate at a higher rate as used supplies are rising while demand has softened. On the other hand, pickup truck values remained strong,” said Anil Goyal, senior vice president of automotive valuation and analytics at Black Book

Considering volume-weighted information, editors determined overall car segment values decreased by 0.33 percent last week; similar to the average weekly decrease of 0.37 percent in values spotted during the previous four weeks.

Midsize car, prestige luxury car and sub-compact car segments declined the most by 0.65 percent, 0.65 percent and 0.64 percent, respectively.

Again looking at volume-weighted data, Black Book reported overall truck segment values — including pickup, SUVs and vans — dipped by 0.14 percent last week; better than the average weekly decrease of 0.26 percent in values seen in the previous four weeks.

The sub-compact crossover was the worst performing truck segment, while pickup trucks improved in value last week.

Turning next to Black Book’s representatives at more than 60 auctions nationwide, the common theme revolved around dealers looking for vehicles that needed the least amount of reconditioning and could be front-line ready more quickly.

First, out of Colorado: “Dealers are chasing the clean units at the auction. The crowd size on a particular lane is pretty much reflective of the quality of the vehicles on that lane.”

Down in Florida, too: “Buyers are searching hard for clean cars but are concerned about over-paying when they find them. Most of the buyers and sellers spoke of softening market.”

As well as in Tennessee: “Consignment and attendance were off but the vehicles that sold brought good money. Front-line ready vehicles sold well, but the others were just OK.”

Up in Washington, it appeared those clean units were tough to find, as the lane watcher indicated: “Below normal sale this week with a higher number of high mileage vehicles and no-sales.”

And finally, out of the Midwest, an auction observer in Wisconsin relayed: “The market is still OK here. Two of the larger accounts here were holding their floors, which resulted in a higher than normal amount of no-sales.”

Copart acquires National Powersport Auctions


Having reached 200 locations worldwide and updating its mobile app earlier this year, Copart made another significant move on Monday, announcing that it has acquired Cycle Express, which conducts business primarily as National Powersport Auctions (NPA).

Officials highlighted NPA currently operates facilities in Atlanta, Cincinnati, Dallas, Philadelphia and San Diego. They explained NPA predominantly auctions pre-owned powersports units on behalf of finance companies, dealers and manufacturers.

“We are thrilled that NPA is now part of the Copart family and believe the team’s expertise will enhance our capabilities,” Copart chief executive officer Jay Adair said. “NPA is the leader in the powersports auction industry and shares our ownership mindset, commitment to challenging the norm, and focus on delivering results.”

NPA chief executive officer Cliff Clifford added, “We are very excited about teaming up with Copart.

“Leveraging Copart’s resources and capabilities with NPA’s industry expertise and market leadership will allow us to kick NPA into high gear,” Clifford continued. “We’re looking forward to taking NPA to a whole new level of growth and success.”

KAR leadership set to speak at NIADA

CARMEL, Ind. - 

KAR Auction Services announced that four of its leaders from KAR and its ADESA and Automotive Finance Corp. business units will be featured speakers and panelists at the National Independent Auto Dealers Association Convention & Expo this week in Las Vegas.

The vehicle remarketing and technology solutions provider’s speakers include KAR chief economist Tom Kontos, AFC chief operating officer Joe Keadle, ADESA director of dealer consulting services Doug Hadden and AFC vice president of operations Johnny Shroyer.

KAR said Kontos and Keadle plan to discuss the current and anticipated economic strengths, weaknesses, opportunities and threats related to independent dealers on Thursday from 8:30 a.m. to 9:30 a.m. (PDT).

On Tuesday, Hadden will deliver a presentation on higher net profits that examines different ways to navigate through lower margins while achieving higher net profits and Shroyer will join other industry experts on the Floorplanning Tips for the Independent Dealer panel.

Both of those are on Tuesday from 4:15 5:00 p.m. (PDT).

For more information about the convention and this year’s speakers, visit .

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