Lane watch: Cautious buyers & firm floors permeate current market
Upon reporting that wholesale values dropped another 0.93%, Black Book gave a succinct summary of the current auction scene through its latest installment of Market Insights released on Tuesday.
Analysts said, “The market continued to experience larger than normal seasonal declines last week as well as continued softening of the conversion rates. Buyers are more particular on what they are willing to purchase, and sellers are holding firm to floors.”
While a little less than the overall market, Black Book indicated that car values on a volume-weighted basis decreased 0.84% last week, which included Labor Day.
Prices within all nine car segments softened, with full-size cars leading the way at1.21%, followed by luxury cars dropping by 1.06%.
Black Book pointed out that values for sub-compact cars consistently have been the slowest declining, but analysts noticed the weekly decrease for those gas-sippers made a notable move, sliding by 0.55% after dipping 0.36% a week earlier.
Moving on, Black Book said all 13 truck segments posted value decreases, resulting in an overall volume-weighted drop of 0.97% for trucks
Analysts determined prices for full-size SUVs softened another 1.59%, pacing the declines in the truck segment. They added prices for full-size SUVs now have dropped for 19 consecutive weeks, with an average weekly decrease of 0.58%.
“Compact and full-size van segments are experiencing softening well below the overall market average, but both segments declined 0.35% last week,” Black Book said in Market Insights.
Rounding out the latest update, Black Book mentioned the Estimated Average Weekly Sales Rate continued to dip, landing at 58% last week.
“Last week kicked off Labor Day weekend and the lanes were a bit slower, as expected,” Black Book said. “Newer model years (model year 2019 to model year 2021) were still dominating the lanes with great conditions.
“Overall, inventory was down last week, which could be due to Labor Day, with many people on vacation. Large independent dealers did not let Labor Day stop them from bidding, as they were active and competitive with franchise dealers in the lanes,” analysts went on to say.