Auction Prices Remain on Upward Tilt in April

It looks like the auction price increases that were predicted to slow after March might stick around for a few more weeks as tax season comes to a close.

According to NADA Used Car Guide, prices in the lanes this week will rise by 0.6 percent, or $100, versus the two-week average.

The biggest spikes are expected in the midsize car segment, which is predicted to see prices rise by 0.9 percent ($125).

Compact utilities and large pickups are also expected to increase, with prices frowing by 0.8 percent and 0.6 percent, respectively.

Trucks saw price strength last week, as well, rising by an average of $51, according to Black Book data. The truck segments continue to impress, remaining in high demand this spring, said Black Book editorial director and senior vice president Ricky Beggs.

Thirteen out of the 14 truck segments saw prices rise last week, according to Black Book.

“This market strength is being led by the very versatile compact crossover utilities at plus-$39 this past week, with this segment now positive week-over-week for four consecutive weeks,” Beggs said.

Going back to the NADA analysis, midsize vans are expected to remain flat this week with no change, and the remaining segments NADA UCG tracks will see slight increases of under 0.5 percent apiece, said David Paris, automotive analyst at NADA UCG.

Though prices remain high, as supply continues to expand this year, prices are expected to continue the annual decline from post-recession highs.

According to NADA Used Car Guide’s 2014 Used Vehicle Price Forecast report released this week, average wholesale prices of used cars and light trucks up to 8 years old will fall by a range of 0.5 percent to 1 percent this year.

The drop is due primarily to an increase in used supply, but the rate of decline will stay modest, says NADA UCG, due to a few macroeconomic factors.

"Economic growth is expected to accelerate to its fastest pace since 2005, keeping demand for new and used autos high," said Jonathan Banks, executive automotive analyst for NADA UCG. "A strong economy, combined with other positive factors, leads to a more positive outlook for used-vehicle prices in 2014."

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.