Lane watch: ‘Good sign’ for spring market
Black Book spotted widespread wholesale value declines happening last week, as analysts also noticed one particular circumstance that they called a “good sign” for the spring market.
According to Black Book’s latest installment of Market Insights, overall wholesale prices dipped 0.49% during the span that wrapped up on Saturday. That’s after a week when values softened 0.34%.
“Buyer attendance at auctions remains strong, but bidding activity is slowing as dealers are reporting weaker consumer demand for used vehicles,” Black Book said in the report.
“Auction sales continue to be hit or miss with witnessed sell rates ranging from 27% to 91% last week,” analysts continued. “Large independent dealers seem to be making a comeback in the lanes and not just the near-prime and subprime sellers. Their resurgence is a good sign for the upcoming spring market, although it adds additional competition among rental companies, smaller independents and franchise dealers.
“It is still normal to see a portion of damaged vehicles in each sale and now repossessions have started to pop up a little more frequently,” Black Book went on to say. “Wholesale values are waning, but floor prices are still being held high in hopes that scarcity in the market will entice buyers to make the leap.”
If dealers decided to make that leap when bidding on cars, Black Book’s data on a volume-weighted basis showed that overall car segment values dropped 0.53%, as all nine car segments declined last week.
Prices in the midsize car segment paced the decreases for the third week in a row, as analysts pegged the drop at 0.76%.
The three consecutive weeks of value increases for subcompact cars triggered Black Book to wonder “if that was an early sign of the spring market.” But alas, it was not since prices for those particular cars slipped by 0.23%.
Meanwhile, Black Book reported that its volume-weighted information showed overall truck segment values decreased 0.47% last week, representing a price dip of 10 basis points week-over-week.
Prices for those difficult to find full-size vans still moved higher, rising another 0.53%. But that’s less than half of the increase analysts saw a week earlier when it was 1.36%.
The change in the wholesale market stopped the upward trajectory of minivan prices, which declined by 0.30% after climbing for 25 weeks in a row.
Black Book added that the decreases for subcompact and compact crossovers were even more noticeable, sliding by 0.90% and 0.86%, respectively.