Used-Car Prices

August ‘perfect storm’ keeps wholesale prices on track for overall rise by year end

CARMEL, Ind., and McLEAN, Va. - 

The unusual summertime wholesale price movements seen by both KAR Auction Services and J.D. Power Valuation Services might push the costs that dealers face in the lanes nearly 3 percent higher by the time the year ends.

The August price updates from both companies conveyed notable wholesale price surges, with KAR chief economist Tom Kontos calling the situation in an online video that accompanied his analysis, “a perfect storm for the used-car market in August as retail sales and wholesale values were both strong.”

He added in his latest Kontos Kommentary that, “Retail demand and upstream remarketing were key contributors to wholesale used vehicle price growth in August, as prices were up on a month-over-month and year-over-year basis.”

According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale values in August averaged $11,049, which marked a 1.4-percent rise compared to July and a 0.9-percent lift relative to August of last year.

Kontos said car prices in total went up 2.2 percent month-over-month, while truck prices rose 1.0 percent, “indicating that car segments are now in better supply-demand balance.”

Meanwhile the team at J.D. Power Valuation Services shared that August prices “ended the month even stronger than expected.”

The J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index increased 2.2 points on a sequential basis to land at 121.9. The reading also jumped 6.3 points year-over-year.

The August index rise represented an increase for the third consecutive month, leaving the reading at the highest level since late 2015.

“The used-vehicle market starting showing its strength in the middle half of 2017, and there are no signs of it letting up,” analysts said in Guidelines. “Most of the market’s left in prices has been driven by mainstream car growth, however, mainstream utility segments continue to show firmness as well.”

J.D. Power Valuation Services elaborated about August car performance, noting that small-car prices rose 2 percent and prices for midsize cars ticked up by 1.5 percent.

Jonathan Banks, the company’s vice president of vehicle analysis and analytics, detailed what’s happening outside of the lanes that’s impacting car prices during a phone conversation with AuSM earlier this month

“Incentive spending is still a bit higher than what you would like to see. The car segments are still a little misaligned, but it’s getting a lot better. It was nice to see what Honda did with the Accord when sales didn’t meet their expected demand. You expect that from Honda,” said Banks, who along with Kontos are among the collection of experts on tap for , the series of industry-leading conferences that begin on Nov. 12 in Scottsdale, Ariz.

“I think we’ve reached the point where if manufacturers keep production in line with the sales we’ve been seeing the past three or four months, I think they’re pretty close, we’re seeing that people still want cars,” Banks continued. “But I think pulling back in production was the right thing to do. You would like to see incentives around 10 percent for cars, but we’re not quite there yet.”

While mainstream car prices are helping to push overall figures higher, J.D. Power Valuation Services explained why the same situation cannot be said about luxury vehicles. Again from the latest installment of Guidelines, analysts pointed to higher incentive spending as the headwind.

Turning back to Kontos and the August information from KAR, he indicated average wholesale prices for used vehicles remarketed by manufacturers rose 3.2 percent month-over-month and 2.0 percent year-over-year.

Kontos noted prices for fleet/lease consignors were up 1.5 percent sequentially and up 8.2 percent annually.

He added that average prices for dealer consignors ticked up 1.9 percent versus July and 0.6 percent compared to August of last year.

And with regard to the other ingredient for that “perfect storm,” Kontos cited data from the National Independent Automobile Dealers Association that showed retail used vehicle sales by franchised dealers increased 4.5 percent year-over-year in August.

The rise for independent dealers was even more robust as Kontos put the year-over-year jump at 9.8 percent.

Kontos went on to mention figures from Autodata, Corp. that revealed August certified pre-owned sales 4.9 percent from the prior month and 1.8 percent year-over-year. According to Autodata, on a year-to-date basis, CPO sales are up 2.5 percent versus last year.                

So with all of that activity in mind, J.D. Power Valuation Services sees wholesale prices rising by 2.9 percent by the end of 2018. Analysts acknowledged the climb might not be that much if negative price factors such as incentives, rising supply, worsening credit conditions and a jump in gas prices play bigger roles. However, they think positive factors — favorable labor conditions, strengthening housing prices and long-term quality improvements — outweigh negatives.

“There are two primary factors why the used market continues to heat up,” analysts said in Guidelines. “First, dealers are placing more emphasis on used-vehicle operations, and second, vehicle affordability is becoming increasingly important to consumers.”

Senior editor Joe Overby contributed to this report.

ADESA Wholesale Used-Vehicle Price Trends

   Average  Price  ($/Unit)  Latest  Month Versus
   July 2018  June 2018  July 2017  Prior Month  Prior Year
           
 Total All Vehicles  $10,902  $10,895  $10,887  0.1%  0.1%
           
 Total Cars  $8,519  $8,548  $8,613  -0.3%  -1.1%
 Compact Car  $6,434  $6,441  $6,582  -0.1%  -2.3%
 Midsize Car  $7,457  $7,533  $7,633  -1.0%  -2.3%
 Full-size Car  $7,275  $7,495  $7,018  -2.9%  3.7%
 Luxury Car  $13,294  $13,172  $13,582  0.9%  -2.1%
 Sporty Car  $14,225  $14,515  $14,164  -2.0%  0.4%
           
 Total Trucks  $12,922  $12,901  $13,058  0.2%  -1.0%
 Minivan  $7,937  $8,652  $8,604  -8.3%  -7.7%
 Full-size Van  $13,306  $13,202  $11,875  0.8%  12.1%
 Compact SUV/CUV  $10,805  $10,829  $10,467  -0.2%  3.2%
 Midsize SUV/CUV  $10,992  $11,135  $11,402  -1.3%  -3.6%
 Full-size SUV/CUV  $13,198  $13,499  $13,353  -2.2%  -1.2%
 Luxury SUV/CUV  $18,495  $18,331  $19,099  0.9%  -3.2%
 Compact Pickup  $9,796  $9,471  $9,615  3.4%  1.9%
 Full-size Pickup  $16,583  $16,386  $17,061  1.2%  -2.8%

Source: ADESA Analytical Services.



Compact-car wholesale performance refutes thoughts of segment demise

LAWRENCEVILLE, Ga. - 

Slightly modifying the famous Mark Twain line in light of how popular utilities are nowadays, Black Book’s latest information showed rumors about how the death of compact cars has been greatly exaggerated.

As a part of this week’s Market Insights report, Black Book reiterated that the three-year retention rates on compact cars have staged a remarkable turnaround in 2018 compared with the last few years. Editors indicated current three-year retention is averaging 43.0 percent versus 39.6 percent just one year ago, with much of this strength attributed to the strong economy and great value on smaller cars currently.

Compact cars are helping to keep the wholesale market steady, according to Black Book.

“Mainstream brand segment values remained stable last week, whereas luxury segments continued to experience negative changes in values,” said Anil Goyal, executive vice president, operations at Black Book.

Looking at volume-weighted information, Black Book reported that overall car segment values increased by just 0.02 percent last week. In comparison, the values had decreased at an average rate of just 0.01 percent per week during the previous four weeks.

Among car segments, editors noticed values of luxury cars (0.29 percent or $54) and prestige luxury car (down 0.20 percent or $68) decreased the most last week.

Again, analyzing volume-weighted data, Black Book determined overall truck segment values (including pickups, SUVs and vans) softened by just 0.09 percent last week. In comparison, the values had dipped by an average rate of 0.10 percent per week during the previous four weeks.

Within truck segments, editors found that values of full-size luxury crossover/SUV (down 0.54 percent or $171) and midsize luxury crossover/SUV (down 0.27 percent or $55) softened the most.

Whether or not it’s a compact car rolling over the block, Black Book representatives stationed at almost 60 sales nationwide spotted brisk activity in the lanes. The anecdotes observers shared covered nearly the entire country, including:

— From Florida: “The rental and off-lease lanes were selling well. Most of the older vehicle lanes struggled due to the poor condition of the units.”

— From Arizona: “The market is still good here as dealers are buying and paying strong prices to obtain inventory.”

— From Massachusetts: “This was the first sale in a long time where the dealer, captive and fleet/lease consignors saw the values and overall activity drop.”

— From Michigan: “Anything really nice with low miles will fetch top dollar whether it is a truck, SUV or passenger car.” 

— From Missouri: “It was a good sale early as they sold almost everything. The no-sales became prevalent toward the end of the sale.”

California startup to deliver price data fueled by advanced machine learning

LOS ANGELES - 

Another startup launched this summer now has a tool designed to give both potential buyers and dealers insight about how retail prices are behaving up and down car rows and beyond in California.

On Tuesday, newcomer CarlStreet announced the general beta availability of its CarlStreet Real-time Market Value (RMV) service. The company said the solution can give consumers and dealers what it contends are up to the minute market values for used vehicles by leveraging advanced machine learning and big data techniques.

CarlStreet emphasized its solution can more accurately model real local market conditions than other approaches.

Previously in stealth mode but now in beta, consumers can research cars on the CarlStreet platform from thousands of dealers throughout California to help them make a more informed decision before their next car purchase.

“Our deep real-time analysis of both regional and hyper-local pricing and sales data gives unique insights to consumers looking to buy their next car or sell the one they have,” said Lyle Dizon, chief operating officer at CarlStreet. “Never before have consumers had access to such an accurate representation of the value of a vehicle.”

In addition to discovering great deals on used vehicles, consumers can also sell their cars using an easy, secure process where CarlStreet can help find a buyer and handle all the back-end paperwork and financing details.

When selling to a private party — even if they owe money on their vehicle or have a lease return — CarlStreet can assist with the financing process to get their buyer a great rate and deal with the payoff.

“This opens up a range of possible buyers previously not available through traditional private party sales channels,” the company said.

For consumers who would prefer not to sell their car privately, CarlStreet offers the ability to get competitive cash offers from dealers to purchase their vehicle directly. The company insisted dealers benefit from having access to this inventory from consumers before they trade it in at another dealership who is likely to send it to a physical auction.

“We started CarlStreet with the goal of modernizing the automotive ecosystem and give consumers more options in a way that’s also friendly to dealerships,” CarlStreet chief executive officer AJ McGowan.

“Dealers often get a bad rap but with the launch of CarlStreet RMV we’re taking an important step in increasing price transparency between buyers and sellers. More transparency equals more trust between all parties,” McGowan went on to say.

More details can be found at .

Current retail traffic keeps wholesale prices strong

LAWRENCEVILLE, Ga. - 

Dealers are looking for bargains in the auction lanes just like potential buyers are when they scour store websites or walk rows of inventory.

As a result, this week’s Market Insights report from Black Book detailed the continued strength currently on display in the wholesale market, with a handful of cars showing increases in early September, as well as trucks.

“The used-vehicle market remains hot as retail buyers show strong demand for affordable personal transportation, and dealers are eager to procure inventory to meet the retail demand,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, editors indicated overall car segment values increased by just 0.09 percent last week. In comparison, the values had decreased at a rate of 0.08 percent per week during the previous four weeks.

Among car segments, Black Book noticed sporty car and compact car values increased the most last week, rising by 0.34 percent or $52 and 0.33 percent or $26, respectively.

Again volume-weighted, editors determined overall truck segment values (including pickups, SUVs and vans) dipped by only 0.04 percent last week. That’s less than what editors recorded during the previous four weeks when truck values softened by a rate of 0.13 percent per week.

Full-size van and full-size crossover/SUV values increased the most last week among truck segments. Those vans rose by 0.24 percent or $33, while the utilities climbed by 0.20 percent or $44.

As far as what Black Book representatives are observing in the lanes when they attend about 60 sales per week, the ongoing wholesale price strength continues to be top of mind for dealers even when metal is turning back at their stores. Here is the rundown going from East to West:

— In Massachusetts: “Dealers are clamoring for trucks but are also purchasing passenger cars to fill in the holes on their retail lots.”

— In Pennsylvania: “Another really good auction this week. The market here is really amazing for a late third-quarter market.”

— In Indiana: “Consignment is still running low here. August was a good month to be a used-vehicle dealer as retail remains strong.”

— In Michigan: “There has been a small increase in the auction inventory recently. Prices continue to be up in both the car and truck segments.”

— In California: “Dealers are expressing frustration about the prices they are having to pay for inventory.”

Manheim index now at highest reading ever

ATLANTA and STAMFORD, Conn. - 

The Manheim Used Vehicle Value Index is now in unchartered territory.

The team at Cox Automotive reported on Monday that wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) increased 2.01 percent month-over-month in August. That jump pushed the index reading to 139.7, which is 6.4 percent higher than a year ago and the highest level for the series over its more than 20-year history.

While not a record, RVI Group reported wholesale price increases on Monday, too.

In the United States, the RVI Used Vehicle Price Index Pre-Release was 1.085 in August compared to 1.057 in July and 1.026 in August of last year. The metrics represented an increase of 2.7 percent month-over-month and an increase of 5.7 percent year-over-year.

The updates from Manheim and RVI Group arrived on the heels of Black Book saying that its index posted the largest single-month increase in seven years.

“The strange summer price appreciation in used cars is partly a function of a strong economy at its peak, with mounting affordability challenges for the consumer that favor growth in used-vehicle sales at the expense of new,” Cox Automotive said in its report that accompanied the latest Manheim index update. “These conditions have supported strong used-vehicle prices for over a year.

“A key factor behind the vehicle appreciation this summer is the fear of import tariffs’ leading to higher prices in the future,” analysts continued. “In addition, consumers are also worried about higher interest rates in the months ahead.

“Combined, these trends encourage buying sooner rather than later. The increase in demand has not been satisfied by flattening wholesale supply and has led to faster moving retail inventory, higher sales efficiency at auction and higher prices,” Cox Automotive went on to say.

Looking at trends in weekly Manheim Market Report (MMR) prices, the abnormal summer bounce that started in June continued in August. As of Labor Day, 3-year-old vehicles are now worth 4.8 percent more than they would normally be worth had typical depreciation occurred instead of the appreciation observed this year, according to Cox Automotive.

On a year-over-year basis, Cox Automotive indicated most major market segments saw price gains in August, but more affordable vehicles are seeing the greatest increases in values.

Analysts added compact cars and midsize cars outperformed the overall market, while vans, utility vehicles and pickups underperformed the overall market.

Also of note, Cox Automotive mentioned that rental-risk pricing strengthened, too.

Analysts determined the average price for rental risk units sold at auction in August was up 8 percent year-over-year. Rental risk prices were up 4 percent compared to July.

The report pointed out that the average mileage for rental risk units in August (at 43,500 miles) was up 4 percent compared to a year ago but down 4 percent month-over-month.

Black Book index posts largest single-month increase in 7 years

LAWRENCEVILLE, Ga. - 

Not even the strength of a hurricane generated as large of a single-month increase in the Black Book Used Vehicle Retention Index as what editors computed for August.

Black Book reported that the index posted a significant month-over-month increase of 1.4 percent. Editors indicated the change last month marked the largest single-month increase since a 1.7-percent increase registered in May 2011. The jump also is larger than the hurricane-fueled increase of 1.2 percent registered last September.

Editors explained that what’s noteworthy for this month’s Index report is that while cars overall and most individual car segments see continued declines in market share, used midsize car sales have seen an increase in market share during 2018.

Furthermore, Black Book pointed out that helping the index increase the most were compact and midsize cars and SUVs, with increases in retention ranging from 1.3 percent to 1.6 percent over the prior month.

Editors went on to mention minivans, full-size cars and luxury cars also saw sizable increases in retention (up to a 1.9-percent increase over the prior month). But those units had less impact overall due to their smaller segment size, according to Black Book.

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as a percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.

“No doubt, many sedan segments in the used market are defying expectations this summer, with demand increasing due to the improving job market and more consumers seeking affordable personal transportation,” said Anil Goyal, executive vice president of operations at Black Book.

“August is usually a down market from a seasonal perspective,” Goyal continued. “With nominal used-car values going up at this time of the year, the seasonally-adjusted Black Book Retention Index registered a strong lift.”

The index dates to January 2005 when Black Book published a benchmark index value of 100.0 for the market.

During 2008, the index dropped by 14.1 percent while in 2016, the index fell by just 6.4 percent.

During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014 when it hit a peak of 128.1.

To obtain a copy of the latest Black Book Wholesale Value Index, . 

Lane watch: Auctions and dealers eager for volume rise

LAWRENCEVILLE, Ga. - 

Along with sharing its latest update on the specialty markets, Black Book reported that wholesale prices remained steady and volume a bit constricted as the calendar flipped to September.

The latest Market Insights report highlighted the strength mainstream sedans have had in the market. Coupled with the effects of increased SUV inventory over the last few years, editors acknowledged possible swinging of the pendulum for cars.

“Used sedans are hot in the market as value-conscious consumers look for affordable transportation,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, editors found overall car segment values increased just a little last week — 0.03 percent. In comparison, Black Book reported market values for cars had decreased by 0.15 percent on average during the prior four-week period.

As Goyal referenced, the midsize car segment experienced the biggest increase, rising 0.24 percent or $21.

Volume-weighted, editors determined overall truck segment values (including pickups, SUVs and vans) softened by 0.11 percent last week. In comparison, the market values had decreased by 0.14 percent on average during the previous four-week period.

Within trucks, Black Book noticed the compact luxury crossover/SUV segment performed the worst, sliding by 0.36 percent or $70.

Among the anecdotes collected by Black Book representatives stationed at sales nationwide, the talk was as much about volume as price, especially in the Southeast.

— From Georgia: “The volume is still down, but the prices are not. Buyers are not thrilled about the extra bidding it takes to secure inventory for their lots.”

— From Florida: “Fewer no-sales today, and about the only vehicles not selling were the large commercial vans.”

— For North Carolina: “An auction GM in North Carolina says that they are consistently selling around 65 percent and believes the high conversions will continue until more supply comes to the physical auctions.”

And talk about volume percolated in the North, too, with the story in Pennsylvania being, “One thing that stood out today was the dealers’ acceptance to higher mileage vehicles which points to the lower supply.”

Finally, a familiar scene unfolded in Massachusetts where Black Book lane watcher said, “The nicer vehicles still bring really strong money but the older, condition challenged ones are a tough sell.”

Update on the specialty markets

As they share regularly, editors also opened a new month by recapping their latest observations of what’s happening in the specialty space.

— Collectibles: With a cumulative total of nearly $370 million, “it’s safe to say that Monterey 2018 was a success,” Black Book said.

— Recreational Vehicles: Editors indicated the average selling price of towables at auction last month crept up about 1.5 percent, reaching another all-time high at just above $15,000.

— Powersports: Black Book determined all segments are down this month in the powersports market. “Most of these are normal seasonal drops, but a few normally strong fall vehicle segments are also down a bit more than is typical for the time of year,” editors said.

— Heavy-Duty: Black Book pointed out that new heavy-duty truck orders are being delivered although the turn-in units are not showing up at auction at the same rate.

— Medium-Duty: Editors closed by noting the used market remains strong despite new inventory adding some downward pressure to wholesale prices.

Sales figures steady, prices ablaze in used-car market

CARY, N.C.  - 

If you think the East Coast is hot right now, look at what’s happening in the used-car market. Especially in terms of prices.

One particular index measuring used-car prices is poised to reach its highest level in almost three years, the annual retail sales rate is approaching 40 million and dealers are showing optimism.

Granted, there could be some concern, specifically around supply.

Starting on the retail side, used-car sales this month are likely to remain steady with July’s figures, with the seasonally adjusted annualized rate actually seeing a nice bump.

That’s according to projections released Wednesday by Edmunds, which said the used-car retail market should once again reach 3.4 million sales for the month. The August used-car SAAR would then be 39.7 million, up from 39.5 million in July.

Following a consignor and wholesale event last week, Cox Automotive senior economist Charlie Chesbrough had this to say about the used-car market: “After talking to dealers at the 2018 IARA Summer Roundtable, it’s clear that the used-vehicle business is good right now.

“The market is looking strong for 2018, with dealers still optimistic for 2019 as well,” he said in emailed comments provided to AuSM.

“However, with concerns that affordability is changing, headwinds may be in sight down the road in 2019,” Chesbrough said. “Anticipation around tariff proposals and their impact on new and used vehicles have also resulted in some pull-ahead activity, as dealers try to position themselves for the future of the used-vehicle market.”

On the pricing side, August could end being the strongest month in three years for the Seasonally Adjusted Used Vehicle Price Index from J.D. Power Valuation Services.

In a , senior automotive analyst David Paris said August used-car prices have shown sequential gains through the first three weeks of the month. What’s more, they’re likely to be higher than first projected by month’s end.

Specifically, the current J.D. Power reading of 122.0 is 2.3 points higher than July’s, Paris said.

If this trend holds, August would represent the index’s highest mark since late 2015 and be the third straight monthly gain.

“The used-vehicle market really started showing its strength in the middle half of 2017, and there are no signs of it letting up. Most of the market’s lift in prices has been driven primarily by mainstream car growth, however, mainstream utility segments continue to show firmness as well,” Paris writes in the post.

“However, luxury car and SUV segments are not experiencing the same long-running positive trend as their mainstream counterparts due in part to higher incentive spend on the new side of the market,” he said.

“There are two primary factors behind why the used market continues to heat up: first dealers are placing more emphasis on used-vehicle operations, and second, vehicle affordability is becoming increasingly important to consumers.”

That’s not to say there are not some negative factors at play.

In fact, Chesbrough at Cox Automotive said one “glaring concern” is used-car supply, especially as the 10-year anniversary of the Great Recession looms.

And the concern is not about having too much; rather, it is about not having enough. 

The tables, it would appear, have turned.

In his analysis, Chesbrough lists these as key impacts on used-car supply:

First, “During the heart of the recession (approximately 2008-2011) the industry lost out on millions of vehicle sales. This is coming back around and resulting in a big hole in supply today, requiring dealers to buy newer vehicles at much higher prices.”

Next, he said: “A strong economy has resulted in fewer repossessions.”

Lastly, “Residual values have been declining over the past couple of years,” Chesbrough said.

On the new-car side, supply is at its lowest point in two years, Edmunds said. Granted, this indicates some realignment of new-car inventory to better meet demand. However, Edmunds said, this is also indication of lower sales versus recent years. 

“There are a lot of things working against the automotive market right now: Incentive spending is maxed out, interest rates are rising, and vehicle prices are reaching record highs,” said Jeremy Acevedo, manager of industry analysis at Edmunds, in a news release, referring to the new-car market.

“Add to that the uncertainty that comes with renegotiating NAFTA and tariff talks and it amounts to what could be a challenging back half of the year for automakers.” 

In a data set going a bit further back, Experian shared some payment data for both new and used, pointing out that new- and used-vehicle monthly payments hit record highs during the second quarter, with the average new monthly payment increasing $20 year-over-year to $525, and the average used monthly payment increasing $13 over the same time period, reaching $378.

Taking an even closer look at the data, Experian explained that finance companies can gain insights from the gap between new and used financing payments, which continues to widen, reaching $147 in the second quarter.
 
“For some consumers, that gap can mean the difference between buying a new or used vehicle,” Experian said in its analysis.

Wholesale prices prove used cars still appeal in a utility-driven retail arena

LAWRENCEVILLE, Ga. - 

Black Book explained why used-car managers should not get frustrated when they see new utility vehicles frequently rolling over the curb on the new side of their dealerships. Turns out, those cars lined up in used inventory are a pretty valuable asset nowadays.

This week’s Market Insights report from Black Book illustrated the continued support of wholesale prices with cars demonstrating greater overall strength than trucks despite America’s appetite for trucks and SUVs.

“Another banner week for used-vehicle values. While consumers prefer SUVs to cars in the new market, cars are in strong demand as the more affordable option in the used market,” said Anil Goyal, executive vice president of operations at Black Book, who also is among the experts on tap to be a part of that begins on Nov. 12 at the Westin Keirland Resort and Span in Scottsdale, Ariz.

Volume-weighted, Black Book indicated that overall car segment values decreased by just 0.06 percent last week. That’s just a fraction of the comparison as editors mentioned values had decreased at a rate of 0.15 percent per week during the previous four weeks.

Among car segments, Black Book reported full-size car values increased by 0.22 percent or $25 last week. The most noticeable car decline involved subcompacts, which saw prices soften by 0.35 percent or $21.

Again reviewing volume-weighted information, editors noticed that overall truck segment values (including pickups, SUVs, and vans) dipped by only 0.16 percent last week. That’s on par with what Black Book reported during the previous month when the rate came in at 0.15 percent per week.

Within truck segments, editors pointed out that small pickup values increased by 0.40 percent or $64 last week, showing that used trucks still will command attention.

Let’s turn next to some of the highlights of what Black Book representatives stationed at nearly 60 sales observed in the lanes. The top anecdotes covered the major regions of the country, reinforcing the ongoing challenge to keep that used-vehicle inventory appealing.

—From Florida: “The market here remains steady, but there were a lot of no-sales in the dealer lanes.”

—From California: “Prices were holding strong with an above-normal number of buyers. We have seen very good sales for several weeks in a row.”

—From Illinois: “The institutional lanes did very well today. One of the independent used-car dealers stated that his business is doing very good on lower-priced vehicles.”

—From Georgia: “There were few no-sales in the highline sale. The dealers continue to complain about a shortage of nice vehicles in the auction lanes.”

Heated wholesale prices might finally cool soon

McLEAN, Va. - 

Perhaps the surprising summertime surge in wholesale prices might come to an end before Labor Day arrives.

Following a rise in July on par with other industry watchers have seen, J.D. Power Valuation Services is projecting that wholesale prices of vehicles up to 8 years in age are expected to soften by about 0.5 percent in August.

Analysts added in the latest installment of Guidelines that their full-year expectations remain intact as wholesale prices this summer have stayed higher than what’s typically seen during this time of year. J.D. Power Valuation Services pegs wholes prices ticking up by about 1 percent by the time 2018 finishes.

“Negative forecast factors hurting used vehicles continue to be incentives, such as an anticipated increase in used supply, worsening credit conditions and increasing gasoline prices,” analysts said in the .

“However positive factors — such as favorable labor conditions, strengthening housing prices along with long-term quality improvements — will outweigh the negatives,” continued J.D. Power Valuation Services, who will send multiple experts to share insights during , which begins on Nov. 12 in Scottsdale, Ariz.

As has been the auction story of the summer, analysts pointed out that the wholesale market “performed exceptionally well” in July. As a result, the J.D. Power Valuation Services Seasonally Adjusted Used Vehicle Price Index rose by 1 point compared to June, reaching 119.3 and marking a rise for the second month in a row.

The report mentioned that July’s action pushed the index 4.7 percentage points higher than the same month last year and 4.8 percentage points above January’s reading.

“Used-vehicle prices have been strengthening since the middle part of 2017 and remain strong deep into the summer selling season,” analysts shared via Guidelines.

“Through July, prices have been elevated for most mainstream segments,” they continued. “However, luxury-segment prices have been declining due in part to higher incentive spend on the new side of the market.”

Drilling deeper into the mainstream-segment world, J.D. Power Valuation Services determined that prices for three car segments are notably higher now than compared to January with prices for compact cars leading the way with a gain of 9.1 percent. Prices for midsize cars and large cars aren’t far off that pace, climbing by 7.3 percent and 7.1 percent, respectively.

What might be a surprise given their popularity, analysts acknowledged that prices for utilities are higher, too, but they’re not rising at the rates seen among cars. Year-to-date, the report indicated that prices for compact utilities is up by 2.8 percent, while prices for midsize utilities are 3.1 percent higher.

Large utilities have absorbed a price hit, sliding by 2.2 percent since the beginning of the year. J.D. Power Valuation Services attributed the softening to a 28-percent rise in volume of those units that are less than 5 years old.

Moving over to the luxury arena, analysts reiterated that higher incentive spending is curtailing a potential price lift for luxury units that’s been experienced by their mainstream counterparts.

Prices for luxury large utilities have dropped the most year-to-date, declining by 5.6 percent. Luxury compact utilities are down 2 percent year-to-date, according to J.D. Power Valuation Services.

Bottom line: Analysts explained that the over-arching value of used vehicles — for both consumers and dealers — is supporting wholesale prices.

“Used vehicles continue to gain popularity with consumers and dealers alike,” J.D. Power Valuation Services said.

“Consumers can save money buying a well-maintained, late-model used vehicle (especially as overall reliability continues to improve), while dealer can capitalize on used-vehicle sales where profit margins are higher than new-vehicle sales.”

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