NADA UCG: Wholesale Prices Slide for Sixth Consecutive Week

It seems wholesale prices are continuing their downward spiral as summer gets underway.

NADA Used Car Guide told Auto Remarketing that all the price segments it tracks are expected to experience declines over the course of the current week.

Why the fall?

NADA UCG explained that “slowing demand related to seasonality, rapidly falling gasoline prices and a growing supply of late-model rental units entering the used market are pressuring down used prices at the moment; this is particularly true for compact cars, midsize cars and midsize vans.”

First up, the compact car segment is expected to see an even bigger drop than last week, predicted to fall by 2.1 percent or $225. This will be the sixth week in a row that compact car segment prices were expected to fall.

After the surge in gas rates left many shoppers searching for a more fuel-efficient ride, now the segment continues to follow fuel prices down.

Per Energy Information Administration data released this week, the average price of regular grade gasoline (all formulations) fell four cents from $3.61/gallon  to $3.57/gallon.  This marks the tenth week in a row that the average price of regular grade gasoline has fallen.

And following closely on the heels of the compact car segment, midsize cars are expected to drop around 1.7 percent or $225, NADA UCG reported.

Next up, luxury cars are also expected to drop 1.0 percent or $225.

Moving along to the larger units, on the light-duty truck side, midsize van prices are expected to fall the most (1.7 percent or $250) followed closely by the midsize utility (1.4 percent or $250) and compact utility (1.2 percent or $175) segments.  

Lastly,  the large pickup, large SUV and luxury utility segments are all expected to drop by under 0.7 percent apiece. 

Wrapping up their analysis for this week, NADA UCG officials noted that, perhaps not surprisingly,  the two-week average rate of depreciation for all segments increased. 

The midsize van segment saw the biggest drop off at 3.1 percent followed by the compact car segment at 2.9 percent and the mid-size car segment at 2.8 percent.

Four- and two-week AuctionNet wholesale average prices are created by collecting all AuctionNet records for vehicles  up to five years of age for a specified period of time.  Prices are then adjusted for changes in mileage and mix.

Current week prices are based on NADA’s proprietary used vehicle value model which includes assumptions for new vehicle prices, used vehicle supply, gasoline prices, and other economic factors.