Lane watch: While overall wholesale prices tick lower, values for compact cars keep surging
Black Book said in its newest installment of Market Insights that overall wholesale prices softened slightly for the first time since the week of April 18.
However, with fuel costs still at unprecedented levels, values for compact cars now have climbed for 14 consecutive weeks.
Analysts reported that the overall wholesale price dip during the week that closed on Saturday was just 0.02%. It came as prices for cars and trucks moved in opposite directions.
On a volume-weighted basis, Black Book determined overall car segment values increased 0.16%, with five of the nine car segments moving higher.
Analysts indicated prices for compact cars jumped another 0.62% last week. Black Book noticed values for sub-compact cars (up 0.09%) and mid-size cars (up 0.04%) also rose, but the rate of gain is slowing.
Black Book added that the only luxury car segment to report a price increase last week was the more affordable near luxury segment with an uptick of 0.10%.
Turning over to the truck market, Black Book’s volume-weighted information showed that overall truck segment values decreased 0.11% last week, compared to the prior week’s increase of 0.04%.
Analysts said nine out of the 13 truck segments reported value decreases.
After 12 weeks of increases, Black Book indicated the compact crossover segment reversed course and declined 0.15%.
Analysts also found that full-size pickups only had six weeks of value increases but now have resumed declines with a depreciation of 0.09% last week.
Black Book said both van segments — compact (up 0.33%) and full-size (up 0.06%) continue to see strength as a result of inventory shortages.
Dropping the most in value of any vehicle segments were full-size crossover/SUVs (down 0.34%) and full-size luxury crossover/SUVs (down 0.36%), according to Black Book.
Analysts wrapped up their latest report by mentioning the estimated average weekly sales rate continues to drop slowly. It’s now at 68% after several weeks of increases this spring.
“The wholesale market continues with the newer used vehicles (model year 2020-2021) dominating the lanes and still very few model year 2022 vehicles running through,” Black Book said in the report. “More buyers seemed to be actively bidding in the lanes last week, but sales continue to decrease. Sellers are still holding on to their floors, but large independent dealers and rental companies made more of an appearance; they stepped up their game creating higher levels of competition for smaller independent and franchise dealers.
“Although inventory count was consistent, we anticipate that the decreasing sales rates correlate to the continual gas price hikes,” analysts continued. “With the gas prices continuing to go up, for the first time in a while, we have seen a turn in most segments going into negative territory. Compact cars and compact vans are still on the rise. However, full-size cars and crossovers, both luxury and non-luxury, are decreasing along with full-size pickups and even mid-size crossovers.
“This will most likely be the trend of these segments until gas prices start going back down to normal,” Black Book concluded.