Lane watch: Compact-car price activity points to early spring
Black Book cited the wholesale value moves by compact cars to explain why signs of an early spring are appearing at auctions.
According to its newest installment of Market Insights, Black Book reported prices of compact cars rose no matter the unit’s age. Values for compact cars 2 years old and newer rose for the fourth week in a row, increasing 0.31%. Analysts said values of compacts between 2 and 8 years old moved higher for fifth consecutive week, ticking up by 0.08%.
And prices for the oldest compact cars heading down the lanes — units 8 to 16 years old — increased for a sixth straight week, moving 0.10% higher, according to Black Book tracking.
“The general wholesale market is exhibiting indications of an early spring, with the depreciation rate easing sooner than the pre-pandemic norm for this season,” Black Book said in the report that overall wholesale values dipped 0.26% during the week that finished the day before Super Bowl Sunday.
“The compact car segment stands out particularly, with vehicles across all age brackets experiencing several successive weeks of value increases,” analysts added.
Looking at the entire car segment, Black Book indicated overall values decreased 0.18% on a volume-weighted basis.
Values for cars up to 2 years old hardly moved, ticking down just 0.02%, according to Black Book, which also said prices for 8- to 16-year-old cars declined 0.11%.
While evidently dealers are hunting aggressively for compact cars, analysts noticed prices for subcompact cars aren’t trending similarly.
As the rate of depreciation is slowing — averaging 0.57% over the last two weeks — Black Book pointed out that streak came after prices for subcompact cars softened by an average of 1.37% weekly to begin 2024.
Black Book added that values for near luxury cars sustained the largest decline last week, sliding by 0.65%.
Turning to trucks, analysts said overall prices for the entire segment decreased 0.29% on a volume-weighted basis.
Black Book determined the newest trucks in the lanes depreciated by 0.25% on average while units 8- to 16-years-old decreased by 0.05% on average.
Stirring interest in the wholesale market are full-size crossover/SUVs since Black Book watched their values rise 0.38% last week.
Also moving higher were small pickups, as Black Book pegged the price gain at 0.26%, marking the first movement higher for those units since the first week of October.
Making notable value moves lower were subcompact and compact crossover, which generated the largest price drops last week at 0.71% and -0.70%, respectively, according to Black Book.
With the wholesale industry venturing into the second half of February, Black Book closed by noting the estimated average weekly sales rate was stable at 55%.
“The initial week of February maintained the stability of the wholesale market seen at the end of January,” analysts said. “There was a modest rise in auction inventory alongside value stabilization within both car and truck categories.
“Over the past four weeks, the market has shown gradual improvement, with no significant fluctuations but rather minor price upticks in certain car and truck segments,” they continued.
“As always, our team of analysts are focused on keeping their eyes on the market, watching for developing trends and gathering insights,” Black Book concluded.