Auction Price Drops Expected to Slow This Week

After seeing prices drop by an average of $50 or more for the past three weeks, NADA Used Car Guide is predicting depreciation will slow slightly this week in the lanes.

Wholesale prices are expected to drop by 0.2 percent (or $25) this week, according to NADA UCG AuctionNet data.

This prediction compares to last week’s drop of an average of $57 for the car segments and $9 for trucks, according to Black Book data.

Declines this week will be led by the midsize car segment, with average declines of 0.6 percent, according to NADA UCG.

Compact cars and midsize utilities are expected to follow with declines of 0.4 percent each.

“Smaller declines are expected in all other segments as prices are expected to slip by 0.2 percent to 0.3 percent,” said David Paris, NADA UCG automotive analyst.

The only segment expected to see prices remain unchanged are luxury cars.

As for increases, midsize vans are expected to lead the pack with an increase of 0.3 percent (or $50).

Black Book’s Ricky Beggs said earlier this month that an improving economy and high construction rates are pushing strong retention in the van segments.

"There continues to be healthy demand for cargo vans because of the construction activity and the improving economy. We anticipate this will continue into the near future. Passenger vans are holding their retention right now because this is a category that is in sync as far as supply and demand," Beggs, editorial director and senior vice president at Black Book, told Auto Remarketing.

Wholesale prices began falling in May, and according to NADA’s latest Guidelines report, the trend isn’t expected to slow down this month.

NADA is predicting that prices will fall between a range of 2 percent to 2.5 percent this month.

As for the rest of the summer, used-vehicle depreciation is expected to drop to a range of 1 percent to 1.5 percent in July, before increasing to a 2-percent decline in August, according to NADA data.

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.