Lane watch: Volume ticks higher, but with rougher units
Sale day certainly can be exciting when hundreds of units go over the block.
But that enthusiasm can quickly dissipate when vehicles to your store and a shop manager does a rundown of how much reconditioning they need to be front-line ready.
That’s the common scenario Black Book summarized in its latest installment of Market Insights released on Tuesday, as analysts spotted wholesale values surging higher for the 13th week in a row.
“The level of weekly increases has slowed from the record set three weeks ago, but the level of increases is nonetheless impressive,” Black Book said in the report. “Inventory levels continue to be tight, both in the new and used retail markets, as well as the wholesale market, further fueling the price required to source used inventory.
“The volume offered for sale each week has remained tight, but this past week there was a small improvement in the available volume, especially on the dealer lanes,” analysts continued. “However, conversion rates did drop slightly as sellers held firm to floors and buyers exhibited restraint on condition-challenged units.
“Condition of units is rising to the top of complaints for buyers as much of the available wholesale inventory in the market right now has some type of issue that needs to be addressed before it can be retailed,” Black Book went on to say.
“With the ongoing new inventory shortage, the availability of used units is expected to remain tight throughout the summer, especially with rental and fleet companies holding their units in service longer until replacements are available,” analysts added.
With those elements in mind, the situation sure sounds like dealerships will remain busy smoothing over dings and scratches, installing brakes and tires and perhaps more intense recon jobs — all while paying more the vehicle from the get-go.
All nine car segments in Black Book’s tracking generated value gains of more than 1% last week. And those popular units to retail during tax season — compact cars — posted a price gain of more than 2% for the fourth week in a row, jumping another 2.33% last week.
While prices for subcompact cars didn’t rise by more than 2% like they have in recent weeks, analysts said they still moved 1.88% higher as values for midsize cars increased 1.94%.
For trucks, all 13 segments ticked higher in Black Blook report but the overall value reading didn’t rise as much as it has in recent week, posting a climb of 1.07%
Analysts noticed units that might appeal to small and large families continued to see price climbs with subcompact crossovers leading the truck segment gains again last week with an increase of 2.13%. Prices for minivans weren’t far off that pace, rising 1.77% to build on their four-week average increase of 1.96%.
Value increases for full-size trucks are slowing a bit, but Black Book said they still rose 1.25%.
The only two segments noticeably below overall value trends are units at a higher price point anyway as Black Book said values for compact luxury crossover/SUVs ticked up 0.50% and prices for midsize luxury crossover/SUVs rose by 0.54%.