Analysts Predict Auction Price Softening

Late last week, NADA Used Car Guide was anticipating that auction prices would continue to correct from tax-season highs.

According to NADA Used Car Guide AuctionNet data, wholesale prices were expected to fall by 0.3 percent, or $50, last week.

There are only two segments that were expected to see prices increase during the week: the large SUVs, with a gain of 1.1 percent; and the luxury utilities, with an increase of 0.3 percent.

NADA UCG was expecting the heaviest losses for the week to be in the compact car segment, with an average drop of 1.3 percent, followed by midsize cars (down 1 percent).

“Smaller declines are expected in all other segments as prices are expected to slip by 0.3 percent to 0.9 percent,” said David Paris, automotive analyst at NADA UCG.

Prices were falling two weeks ago in the lanes, as well.

According to Black Book data, the car segments saw an average decline of $58 two weeks ago, while the trucks fell by an average of $5.

Black Book editorial director Ricky Beggs said,  “Over the past couple of weeks we have noticed a softening of the market with values and sales conversions. But don’t be alarmed with this trend, as we see it as part of the normal expected depreciation.

“The resulting numbers this past week are very similar to year ago levels,” he added.

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.