Though NADA Used Car Guide reported earlier this week that it expects wholesale prices to see start seeing increases through March, 2013 started off with some decreases in the lanes.

According to RVI’s latest Market Update, wholesale values, seasonally adjusted on two- to five-year-old vehicles, saw a decrease of 3.4 percent in January when compared to December.

But the rates seen this past month in the lanes are still higher than 2011 prices during the same period.

On a year-over-year basis, prices are up 4.6 percent

But, only six segments showed price gains from December, RVI reported.

To get a better idea of what is causing this drop, Auto Remarketing asked RVI Group vice president Rene Abdalah what the factors were behind the price slide this past month.

Abdalah said the key to the trend lies in new-car sales rates.

“The drop in wholesale prices can be attributed to new-car sales. New-car sales have increased to over 15 million SAAR since November, helped out by increasing incentive activity,” Abdalah said.

“This has made new-car pricing more attractive than used-car prices, relatively speaking. We expect used-car prices to remain strong for the first part of the year, overall, and begin trending down as supply begins to increase,” he continued.

As more off-lease units and trade-ins flow into the used market this year, supply is expected to loosen as 2013 progresses.

Interestingly, winter weather aside, larger vehicles saw the biggest price decreases in January.

In fact luxury full-size sedans (15.2 percent), full-size SUVs (9 percent), and full-size sedans (7 percent) all saw the greatest month-over-month price decreases in January.

That said, RVI pointed out that most all segments showed losses this past month, as well.

It seems even with snow on the mind, consumers are looking at numbers at the gas pump and turning towards more fuel-efficient units.

“Gas prices began to increase in January. On a monthly average, they only increased by 1 cent, but by the end of the month they had increased to $3.43/gallon. Since the end of January, gas prices have increased by 40 cents,” Abdalah added.

As for new-car pricing, RVI Group expects prices will be affected by new incentive offerings in the coming months.

“New-car pricing is expected to remain strong through mid-2013 before we see a decline in new-car pricing. Incentive activity will play a role in new-car pricing as manufacturers work to gain market share,” Abdalah concluded.
 

Sarah Rubenoff can be reached at srubenoff@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.