Used-Vehicle Values Soften Despite Relief at Pump

November 11, 2008

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McLEAN, Va. — Typically, when fuel costs decline like they did last month, some used-model classes will often show an upswing in price.

But this didn't happen in October, as the credit crunch stifled growth and caused softening in every used-vehicle segment, according to the latest AuctionNet data from NADA Used Car Guide.

"The price weakness in October is a product of the credit crunch, offsetting gains that would be typical for certain vehicles during a period of falling gas prices," officials indicated. "Prices in all segments were driven down by the absence of funding."

Among all one- to five-year-old vehicle segments, passenger cars showed the biggest price decline from September, as their wholesale values fell 9.6 percent to $11,620.

According to NADA Used Car Guide, this "washed away" the progress these models have made since January.

"The decline in passenger cars prices — especially for smaller, more fuel-efficient units — was compounded by manufacturers turning up production volumes and expediting model launches, in conjunction with the credit crunch," executives noted.

What's more, pickups and SUVs fell 5.7 percent and 5.3 percent, respectively. These segments had been making steady improvements each month since July.

Meanwhile, crossovers were down 6.3 percent from a month ago at $14,393 and vans took an 8.8-percent price hit at $9,587.

Looking forward, while these challenges will likely persist during the fourth-quarter, NADA Used Car Guide analysts project some relief during the spring of 2009.

"The stalled mechanics of the market, in the absence of credit, will continue to keep prices soft for the fourth quarter of 2008," explained Terrence Wynne, director of editorial and data services for NADA Used Car Guide.

"As credit opens up and the supply of funds flows into the secondary market, prices should improve for the spring market and continue to improve throughout the rest of 2009 as each credit tier becomes active again," he continued. "When this occurs, the mid- to near-term relief from high gas prices bodes well for the used market and will continue to be a driving factor in resale values."

Auction/Wholesale