Lane watch: Late-model compact cars & small pickups stay in demand
Black Book said the wholesale market is showing “typical levels of depreciation expected for this time of year,” after overall values dropped 0.45% last week.
What’s intriguing analysts most, however, is what’s going on with compact cars and small pickups, perhaps the vehicles currently most appealing to your potential retail customers.
“The shortage of budget-friendly, newer used vehicles is boosting demand for the 0- to 2-year-old compact car and small pickup segments,” Black Book said in its newest installment of Market Insights, released on Tuesday.
Analysts found that values for compact cars less than 2 years old ticked up 0.08%. That stopped a streak of two weeks in a row of decreases for those specific units after they had risen in value for 10 consecutive weeks.
And Black Book noticed prices for small pickups less than 2 years old rose 0.15% last week, representing an upward movement for those units for the eighth time in the past 11 weeks.
Beyond the overall wholesale price decrease and activity involving those specific vehicle segments, Black Book pointed out the auction conversion rate rose 2% from the previous week to land at 58%. Meanwhile, analysts estimated that used retail days to turn is now at roughly 54 days.
“The recent increase in depreciation for both car and truck segments is notable, with full-size cars decreasing by 0.77% and full-size crossovers/SUVs by 0.97%,” Black Book said in the report, which also mentioned prices in all nine car segments and 11 of 13 truck segments decreased a week ago.
“This volatility in the wholesale market during this time of year is not atypical,” analysts continued. “Several factors are contributing to the current market uncertainty, including the upcoming presidential election, which is only a few weeks away, continued high interest rates, and the impact of two recent hurricanes in the Southeastern region over the last 45 days.
“These elements collectively create a challenging environment for the automotive market,” Black Book went on to say.
A couple of other trends to note: Black Book noticed values for the oldest cars and trucks going through auctions are on the way down.
Analysts pegged last week’s price decrease for cars that were 8 to 16 years old to be 0.58%. Prices for trucks that old softened by 0.46%, according to Black Book tracking.
With November set to begin on Friday, Black Book reiterated, “As always, our team of analysts are focused on keeping their eyes on the market for developing trends and gathering insight.”