LAWRENCEVILLE, Ga. -

Thanksgiving turned out to be softer for all involved as Black Book noticed weaker trends on both the wholesale and retail fronts. The observations stemmed from a holiday timeframe typically filled with some of the largest gatherings on the calendar, but derailed this year because of the pandemic.

As Black Book analysts explained it in their newest update, “With COVID-19 cases spiking around the country and last week being a holiday, many dealers saw soft retail demand.    

“Due to the Thanksgiving holiday, it was a short week on the lanes,” Black Book continued in its latest COVID-19 Market Insights. “This coupled with weaker retail demand led to a higher no-sale rate.

“However, the vehicles with low miles and good condition continue to garner the most attention, but the ‘edgier’ units with higher miles and rougher condition reports aren’t seeing the same attention they did over the summer,” analysts continued.

“Dealers are saying these units that require extensive reconditioning aren’t worth the risk of overspending and taking too long to turn,” Black Book went on to say.

Perhaps a source of higher-quality inventory could be the off-rental channel. Black Book delved into the predicament facing rental-car companies such as Hertz, which already has filed for bankruptcy and the day before Thanksgiving announced the potential sale of Donlen.

“It’s looking like the holiday season won’t involve as much travel for many families this year, and this is bad news for rental companies that typically see a spike in demand to finish the year,” Black Book said. “This will lead to additional rental units coming to the used market before the end of the year.”

After discussing those overall trends, Black Book dug into how wholesale values moved as auctions, dealers and their customers likely enjoyed some turkey and trimmings.

Beginning with the car segment, Black Book indicated that volume-weighted data showed overall car segment values decreased 0.48% over the last week. That’s above the 0.31% depreciation reading analysts spotted a week earlier since many sellers held firm to floors in the auction lanes.

“Fuel prices continue to be at low levels and that coupled with the change in consumer preferences away from cars is taking its toll on the subcompact car segment,” Black Book said while noting values for these particular units now have dropped for 14 weeks in a row. Analysts computed the average weekly decline at 0.71%. 

Also of note among cars, the value behavior of luxury units continues to catch Black Book’s attention.

“The luxury segments started to see increases in weekly depreciation rates two weeks, ago and the trend continued this past week,” analysts said. “Some of the largest luxury sellers held firm to floors longer than the mainstream sellers.

“This strategy led to higher no-sale rates, but values stayed stronger longer than is typical for the time of year,” Black Book continued. “With floors falling that trend is now changing. Look for this to continue as supply from these sellers has increased after weeks of lackluster sales rates.”

Moving on to trucks, Black Book reported that its volume-weighted information showed overall truck segment values — including pickups, SUVs and vans — declined 0.38% last week. That reading is a slight increase in depreciation compared to the previous week’s drop of 0.35%. 

Just like their car brethren, Black Book indicated values in the fuel-efficient subcompact crossover segment continues to decline.

This past week, these units led all trucks with a drop of 0.88%. And like in the car space, these smallest crossovers have seen their values soften for 14 consecutive weeks with the same average analysts pegged for sub-compact cars (0.71%).

Furthermore, values for small pickups is in the midst of quite a decline streak, too. Analysts said values for small pickups started to drop 13 weeks ago by an average of 0.51% per week. 

“Supply has increased in recent years after Ford and GM returned to the segment, and this increase in supply, coupled with low fuel prices, is pushing prices lower week-after-week,” Black Book said.

Two other tidbits from the latest COVID-19 Market Insights might interest dealers.

“As we head into the holiday buying season, many consumers are turning to online purchasing. This increase in digital purchasing is putting a strain on delivery companies when it comes to finding enough delivery vans, both new and used, to keep up with the increase in deliveries,” Black Book said. 

Analysts also added, “You could see fewer Cadillac dealerships around the country in the future. As Cadillac makes their push toward EVs, they are giving dealers a buyout option to give up the Cadillac brand and avoid completing the necessary upgrades and training to become a Cadillac EV dealer.”