The year has started with a big push in volume for newer used cars, as nearly 273,000 late-model units made their way into the auction market last month.
And that includes massive lifts from some SUV and truck segments.
That’s according to the latest Guidelines report from J.D. Power Valuation Services, which said auction volume for late-model vehicles — i.e. cars from the 2015 through 2018 model years — was up 33.8 percent month-over-month.
However, January’s late-model auction volume total was off slightly (down 0.8 percent) from the same month a year ago.
The lifts in truck and SUV volume were particularly strong, J.D. Power said, with SUVs topping the industry: There was a 63.1-percent hike for compact premium SUVs and a 24.9-percent jump for large SUV volume.
Looking at the breakdown of late-model vehicle volume at auction in January, 54 percent were cars and 46 percent were trucks, according to J.D. Power.
So cars still dominate the volume. Still, the gains in truck and SUV auction volume could be a welcome sign for some who have found that the mix in vehicles coming off lease, for instance, hasn’t reflected consumer demand on the retail side.
“That is absolutely off-balance,” said AutoNation chief executive Mike Jackson, when asked during the retailer’s latest earnings call if the vehicle mix among the off-lease volume was in line with consumer demand.
“But the way you have to think about it is, these are vehicles that were put in the marketplace three or four years ago, and the shift had already started towards trucks back then and has only accelerated since then,” Jackson said. “So it’s not ideal, and that then will be reflected in the pricing.
“But still, it’s a value point for consumers and a volume of choice that they never had before.”
In a conference call with media earlier this month, Autotrader executive analyst Michelle Krebs shared an example of a specific vehicle that’s often turned first in the fleet segment and then impacted by the appeal of utilities.
She added how the matter is compounded with an off-lease surge of popular models.
“With the (Chevrolet) Cruze, that’s a car that has significant fleet sales. When GM cuts back on fleet, it’s going to hit vehicles like the Cruze,” Krebs said.
“There’s are going to be a lot of off-lease utility vehicles coming back into the market so someone might be thinking about a brand new Cruze because that what’s they can afford — and I’m not picking on the Cruze — but they really want a sport utility. And now they’ve got more choices with more 3-year-old utilities in the market,” she went on to say.
Staff writer Nick Zulovich contributed to this report.