NADA Used Car Guide: Auction Prices Continue to Strengthen

By Joe Overby, Staff Writer
August 18, 2009

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McLEAN, Va. — During the first week of August, wholesale prices across the board showed an upward movement, as all one- to five-year-old vehicle segments displayed month-over-month gains, according to the latest AuctionNet data from NADA Used Car Guide.

Leading the way was the cars segment, whose wholesale prices through the first week of the month climbed just under 1.5 percent from July, according to officials. The auction prices of SUVs were up just more than 1.2 percent, while vans increased just less than 1.2 percent.

Pickups were next, as their values were up roughly 1 percent, and crossovers improved more than 0.6 percent, NADA Used Car Guide indicated.

"Used-vehicle supply remains extremely tight," explained Mike Stanton, vice president and chief operating officer of NADA Used Car Guide. "Wholesale prices continue to climb in the lanes and remain strong for trucks/SUVs and most car segments, especially for mid-August."

Continuing on, Stanton noted: "However, the overall wholesale strength we are seeing is not uniform throughout all segments. In fact, some segments, like the entry subcompact are currently trending downward.

"We have also seen a disconnect between the wholesale and retail markets over the past several months," he added. "In other words, the rise in prices on the wholesale side have not translated to a lift in retail pricing until recently, which we have reflected in the August edition of the UCG."

Looking at July's data, pickups and SUVs had the biggest year-over-year gains, as the wholesale prices of both were up more than 30 percent from July 2008. Pickups moved ahead approximately 1.3 percent from June, and SUVs were up almost 2 percent.

Continuing on, crossover values climbed more than 10 percent from July 2008 and more than 1.5 percent from June.

Meanwhile, van prices improved just less than 10 percent year-over-year and moved up more than 2 percent from the previous month.

Car values remained relatively static year-over-year, but climbed 0.5 percent from June.

Looking forward, Stanton stated: "We anticipate that most car segments will hold flat which is atypically good performance, given the time of the year. Trucks and SUVs have repositioned themselves at a higher than usual wholesale price point.

"We will respond in the coming editions of the UCG and expect these numbers to remain strong as well throughout the rest of the year," they added.

Wholesale Volatility Trends

Moving on, the report also included NADA's Weekly Historical Volatility Measure, which looks at price volatility and risk.

Basically, the HVM describes the amount of transaction price changes in given segments on a weekly basis, provides a picture as to how volatile averages are, and offers a projection of how values may change in the coming weeks.

During the first week of August, the segment (of three-year-old vehicles) with the most volatility was large SUVs, which had an HVM of 14.6 percent.

The industry average was 9.2 percent.

Following large SUVs were large pickups (12.9 percent), intermediate compacts (11.1 percent), compact CUVs (10.6 percent), intermediate large vehicles (10.4 percent), luxury large vehicles (10.2 percent) and midsize vans.

Conversely, luxury large SUVs had the lowest volatility, with an HVM of 5.7 percent. Other segments below the industry average included midsize CUVs (6 percent), premium luxury large vehicles (6.2 percent) and intermediate midsize vehicles (7 percent).

Retail Trends

Next, on the retail side of the used-vehicle market, July's sales were more than 3.5 million units, down from almost 4.5 million used vehicles sold in June, the report noted, citing CNW Research data.

Despite the dip from June, used-car sales were up slightly year-over-year, marking the third straight month of positive movement.

Economic Indicators

Finally, NADA Used Car Guide shared a few overall economic indicators from July. During the month, the unemployment rate was relatively static at just over 9 percent, officials noted, citing Moody's Databuffet.

In January, unemployment was at 6 percent and has continued on a steady rise throughout 2009.

And after a steady climb to the 40-50 index range after hitting roughly 20 in January, consumer confidence trended downward toward the 40 percent range as July came to a close, according to data from Moody's and The Conference Board.

Auction/Wholesale