McLEAN, Va. -

McLEAN, Va. — With the new model-year lineups arriving on dealership lots, used-vehicle prices have softened, albeit modestly, in September, according to NADA Used Car Guide. 

While this month typically marks the start of the end-of-year used-value slowdown, the usual September-through-December softening won't be as dramatic this year, analyst Jonathan Banks pointed out. 

"Historically, this is when the used market begins its steep seasonal decline, which lasts for the remainder of the year," shared Banks, NADA Used Car Guide's executive automotive analyst. 

"2010, however, will be slightly different in that depreciation will be flatter than traditional trends due in some part to tighter inventory on the new vehicle side, which has alleviated aggressive sell-down incentives on the current model year," he added. 

Usually, there is a 2 percent to 4 percent month-over-month decline in used-car values in September, but this year, the drop-offs have mellowed. 

Banks said that "the specific movements by segment and model year confirms NADA's optimism towards vehicle values, with declines averaging closer to 1 percent with many segments, especially trucks, being relatively flat for all model years." 

Discussing August AuctionNet data, this showed a "flatter depreciation curve," Banks noted, pointing out that used prices were stronger on a month-over-month level. 

Limited new-vehicle inventories — and limited vehicle supply, overall — pushed this trend, Banks said. 

Interestingly enough, auction sales volumes were on somewhat of a roller-coaster ride in August. 

During the first half of the month, because of restricted used supply, it appeared that auction sales would hit the "lowest point since December of last year," Banks noted. 

In the second half of the month, however, things changed. There was a bounce-back in sales, particularly for the 2009 and 2010 models returning from fleet and lease terms, Banks argued. 

"By the end of August, sales volumes for these model years nearly doubled the volume witnessed during July," he shared. 

Moving along, dealers have apparently been urgently looking for high-quality used-vehicles, Banks noted, citing anecdotal reports. Backing up these stories is the fact that the bulk of the segments and model years examined by NADA Used Car Guide either increased in price or remained steady from July to August. 

Breaking it down by segment, there has been greater strength price-wise on the truck side, as compared to cars. 

"Stable fuel prices continue to be a driver for strong truck values while consumers in both the new and used market are losing interest in vehicles that are primarily purchased for fuel economy, such as Smart cars and hybrids," Banks noted. 

Continuing on, Banks also looked at an interesting trend relating to certified pre-owned-worthy vehicle value trends. Prices here have climbed in light of restricted supply on units that can fit into CPO program 

"With the tight used supply, especially on lease returns, the market has witnessed a surge on prices for high-quality late-model used vehicles that can be entered into manufacturer CPO programs," he pointed out. 

New-Vehicle Projections 

Moving over to the new-car side of the market, Banks said the impact of the economy continues to dampen things. On a month-over-month basis, there was "moderating" in August sales. These figures were much softer than the August 2009 numbers, which were pushed up by CARS, Banks noted. 

As far as what's in store for the rest of the year, the majority of forecasts point to a softer-than-previously expected full-year new-vehicle sales total around 11.5 million units, he added. Previously, it was projected that 2010 could see 12 million units sold. 

"On a positive note, this is much stronger than the 10.4 million sales of last year, the industry is profitable, and the lower new-car sales will keep supply tight and new and used prices firm," Banks shared.