Tag Archive | "used-vehicle values"

Black Book’s Index Records Largest Single-Month Increase Since 2012


LAWRENCEVILLE, Ga. — The replacement of the up to 500,000 vehicles damaged by Hurricane Harvey began last month, fueling the largest single-month increase in Black Book’s Used Vehicle Retention Index since March 2012.

The index increased from 112.6 to 113.9, with compact cars (up 2.8%), compact crossover SUVs (up 2.4%), full-size cars (up 2.5%), and mid-size cars (+2.3%) each realizing significant month-over-month increases within the index.

“We certainly anticipated a near-term increase in the index in last month’s report, and with the storm replacement activity kicking in, we believe this activity will continue in the next month but not much longer,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “We saw a nice bump in several car segments, and we also anticipate several truck segments to see increases as well, especially with the demand for service and construction vehicles. It was interesting that mainstream car segments and compact SUVs experienced the largest increase in immediate replacement demand.”

The Index dates back to January 2005, when Black Book published a benchmark index value of 100 for the market. During 2008, the index dropped by 14.1%. In 2016, it fell another 6.4%. During 2011, the index rose strongly from 113.3 to 123 by the end of the year, as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014. That’s when it peaked at 128.1.

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Vehicle Depreciation Accelerates Heading Into Q4


LAWRENCEVILLE, Ga. — A steep decline in Crossover/SUV wholesale values, which have been strong all year, may point to more than seasonality as the reason for higher depreciation recorded for two-year-old vehicles last week, Black Book said this week.

This week’s Black Book Market Insights report show a greater weakening in pricing on vehicles in both car and truck segments heading into the fourth quarter, which is typical this time of year. What caught the firm’s eye, however, was that most crossover/SUV segments showed the highest value declines last week, with the full-size crossover/SUV segment leading the way with a 1.12% drop.

“Typical seasonality trend of the higher depreciation in the fourth quarter continue,” noted Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “Crossover/SUV values, which have been strong all year, are also starting to see steeper declines.”

Volume weighted, overall car segment values decreased 0.80%, which was higher than the depreciation rate of 0.69% seen in the previous four weeks. Leading the way were the mid-size and sporty car segments, which decline by 1.20% and 0.88%, respectively, last week.

The overall truck segment values, including pickup, SUVs, and vans, decreased by 0.76%, which was higher than the depreciation rate of 0.57% seen in the previous four weeks.

Past seasonality trends, according to Black Book, show that vehicle depreciation is typically highest in the fourth quarter. This year is looking to be no different, except that retention values are lower this year than what was recorded the previous four years.

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Car Depreciation Accelerates in August, Black Book Reports


LAWRENCEVILLE, Ga. — The average price of a used vehicle for model years 2011-2015 depreciated 2.4% during August, noticeably more than July’s 1.5% decline, according to Black Book.

The decline is also notably more than what was recorded the last three years during the month of August — even higher than August 2014’s 1.9% depreciation rate. Cars overall recorded the highest depreciation, with prices falling 3.1% compared to 1.9% in July. Truck segment showed depreciation of 1.8% for the month, with all vehicles currently averaging a 12-month depreciation change of 16.2%.

Depreciation for near-luxury cars, including the Acura ILX, Audi A4, BMW 3-Series, Cadillac ATS, and Lexus IS250, was the highest at 3.7%. Vehicles in this segment finished the month with an average price of $18,112, a 19.5% decline from year-ago levels ($22,501).

Full-size pickups, including the Chevy Silverado, Dodge Ram, Ford F150, and GMC Sierra, recorded the highest retention, with prices depreciating only 0.6%. Vehicles in this segment finished the month with an average price of $24,372, a 10.2% decline from a year ago ($27,152).

Four other vehicle segments saw depreciation of 3% or greater in August. Those segments were the sub-compact car (3.5%); sporty cars (3.4%); luxury cars (3.3%); and compact cars (3.3%).

The top six segments with the weakest retention during August were all cars. And while prestige luxury cars recorded the strongest retention among all car segments, its 2.2% depreciation rate made it just the eighth best-performing segment overall for the month. In fact, just two car segments ranked in the Top 12 among retention for the month (premium sporty car depreciated 2.7%).

“As fall approaches, depreciation trends continue to accelerate as we head toward the last few months of the year,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black book.  “We can expect to see lower retention in cars across all segments as the year continues, and we’ll continue to monitor truck levels to see if they also see weaker retention overall.”

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Wholesale Prices Rise Again in May, Manheim Reports


ATLANTA — Wholesale used-vehicle prices increased again in May, suggesting dealers have continued to achieve efficiency gains that allow them to bid-up auction prices even as gross margins narrow.

The May increase, which followed an April increase, resulted in a year-over-year gain, according to Manheim’s Used Vehicle Value Index.

Total used retail unit volumes rose 6% in the first four months of 2016. Preliminary numbers suggest sales rose again in May. Likewise, CPO sales jumped 6% in the first four months of the year, increasing again in May.

“Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased in May, resulting in a Manheim Index reading of 124.5,” Manheim stated in its report, in part. “The large monthly rise, combined with weakness this time last year, resulted in a year-over-year gain — the first since December of last year.

New vehicle sales: New car and light-duty trucks sold at a seasonally adjusted annual selling rate (SAAR) of 17.4 million in May. The number was an improvement over April’s 17.3 million pace, but below last May’s 17.6 million.

For the first five months of 2016, the SAAR averaged a modest 17.2 million, despite heavier fleet sales. In the first five months, new-vehicle purchases increased 8% for rental car companies, 11% for commercial fleets, and 38% for government agencies.

“At the start of the year, there were indications that manufacturers were going to accept the leveling-off of sales at last year’s record pace, but announced incentives for June picked it up,” Manheim stated in its report. “Overall, new-vehicle inventory levels are reasonable, but the mix is imbalanced. On net, we expected the new-vehicle market will have a slightly negative impact on used-vehicle residuals in the coming months.”

Unadjusted prices: A straight average of auction prices remained well above year-ago levels in May due to the share shift toward commercial consignment and lower average mileage for both dealer and commercial consignment.

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Used-Vehicle Pricing Continues to Ease


ATLANTA – Wholesale used-vehicle prices declined in March for the third consecutive month, illustrating the long-anticipated dip in pricing. This brought the Manheim Used Vehicle Value Index — a measure of wholesale prices adjusted for mix, mileage and season — to a reading of 122.5 in March, a decrease of 1.6% from a year ago.

“While wholesale prices have fallen each month in 2016, experts have long predicted pricing would ease this year and it’s no cause for alarm,” said Tom Webb, chief economist for Cox Automotive. “Evolving industry practices may be muting what used to be a strong spring pricing bounce, and it is important to keep in mind that wholesale prices increased somewhat this year before the history-based seasonal adjustment, which may be less relevant in today’s market.”

Preliminary numbers suggest that dealers had another strong used-vehicle sales month in March. According to the NADA, both franchised and independent dealers experienced double-digit gains in used-vehicle sales for the first two months of 2016. Additionally, with an increase of 215,000 jobs in March, total U.S. employment has risen by 13.9 million jobs over the past six years.

The stability in the labor market – measured by initial jobless claims or job openings per job seeker – provides the foundation for low risk-adjusted delinquency rates and, thus, good credit availability. As a testament to this, overall CPO sales were up 5.1% in the first quarter, with March coming in especially strong with a 9.6% increase.

For rental risk units, auction sales rose in March as higher new unit sales into rental allowed the retiring of older units in the fleet. The average auction price — adjusted for broad shifts in mix and mileage — rose 1% from February but was down 7.3% from a year ago.

Vehicles in the $7,000 to $10,000 price range continued to face the most competitive pricing pressure in the first quarter, while vehicles valued above $15,000 proved better. The percentage growth in auction volume was slanted towards units above $25,000, the firm noted.

Here’s a look of first quarter wholesale pricing by vehicle segment:

  • Compact Car prices were down 9.1% in March over the same period last year and continued to underperform the overall market due to extremely competitive pricing of new vehicles and more consumers shifting to small crossovers.
  • Midsize Cars, typically one of the weaker segments, showed a somewhat modest decrease of 1.7% compared with other car classes over the same period last year.
  • Pickups and Vans showed mixed results, as pickups represented the only uptick of all major market classes with a 7.4% increase while vans were down 2.4%. The increase in pickup pricing can be partially attributed to lower gas prices.
  • Luxury Car wholesale pricing performed poorly this quarter after stabilizing at the end of 2015 and was down 3.4% compared with last March.
  • SUVs and CUVs decreased 2% compared with last March despite the continued increase of vehicle miles of travel thanks to lower gas prices and favorable lending.

“While fundamentals suggest the current pricing trend will last longer than the earlier downturns in pricing in this cycle, the year as a whole is setting up well and we may be able to avoid extreme volatility in wholesale pricing,” said Webb.

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Kelley Blue Book Adds Self-Service Portal for Mass Vehicle Valuations


IRVINE, Calif. — Kelley Blue Book now offers its customers a new self-service interface for easy access to new and used-car Kelley Blue Book Values and configuration data by vehicle identification number (VIN) within its suite of business-to-business solutions.

Kelley Blue Book Values incorporate more than 250 sources. Using flexible file formats, customers can quickly obtain current vehicle valuations in real time by simply inputting the desired batch VIN information using a Web-based interface.

“The latest addition to Kelley Blue Book’s suite of industry solutions gives customers easy access to useful VIN-specific data and timely, relevant new and used-vehicle valuations on their own time,” said Dan Ingle, vice president of valuations and industry solutions for Kelley Blue Book. “Leveraging Kelley Blue Book’s nearly 90 years of automotive expertise, providing trusted values, unparalleled data and integration tools for both new and used vehicles, we continue our mission to be a vital resource for our customers.”

All VIN-related information is obtained from factory data, and includes manufacturer order codes. Kelley Blue Book also provides all associated VIN trims, if more than one is identified from the decoding process.

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