Auction Values Off 4 Percent; New-Car Transaction Prices Dip $500
The auction values of late-model used vehicles are down about 4 percent year-over-year, Kelley Blue Book’s Alec Gutierrez told Auto Remarketing on Wednesday afternoon, also pointing out that this marks the first time since 2009 that a softening has occurred.
Lower prices in the used market come in the wake of softer new-vehicle prices and the used supply situation improving, said Gutierrez, senior market analyst of automotive insights at KBB.
Of course, used prices have long been at incredibly high levels, with some late-model fuel-friendly units in the lanes pressing close to original MSPR levels during these gas price peaks, he added.
But as analysis from Gutierrez and others have indicated in recent weeks, the used-price dynamic is beginning to change.
In fact, Black Book managing editor Ricky Beggs pointed out that just 16.7 percent of Black Book’s daily used-vehicle value adjustments last week were increases; and this was a trend steady with the previous two weeks, he added.
On the new-vehicle side of the market, there has been a $500 year-over-year decline in the average Kelley Blue Book Purchase Price.
KBB determines this sum based on actual new-vehicle transactions and updates it weekly to account for changing market conditions.
This drop in the price of what consumers are paying for new vehicles has been spurred by the fact that sales are no longer being pushed down by low inventory, meaning “supply is meeting demand,” KBB noted.
Showing the most significant new-vehicle price declines are those from the Japanese brands whose inventory was shortened harshly by the earthquake and tsunami a year ago.
“The average Honda model is selling for nearly $1,200 less than this time last year, and a Subaru, Mazda or Toyota is approximately $700 to $800 more affordable. Toyota and Honda have regained 4.5 and 2 percentage points of market share respectively through May 2012,” said Gutierrez.
“Compare this to the average year-over-year declines of less than $500 for Ford, Chrysler and General Motors, and it’s no wonder the Japanese automakers have been able to considerably increase market share this year,” he added.