IRVINE, Calif. -

Though industry analysts have found that wholesale prices are sitting at high rates as 2013 gets underway, these same experts do not expect hiked prices in the lanes to last for long.

In fact, Kelley Blue Book's latest Blue Book Market Report said that as the effects of Hurricane Sandy begin to wane, wholesale values are expected to return to normal.

RVI Group’s Rene Abdalah gave Auto Remarketing the same prediction, attributing the expected decline in prices to increasing used supply

"Used-car prices are expected to decline in 2013. Supply is expected to increase throughout the year, which will contribute to the decline in used-car prices, although supply will still remain at low levels (historically speaking)," Abdalah told Auto Remarketing.

Wholesale values may be on the way down, but here’s where they sit now.

Though KBB's  Alec Gutierrez said values dropped modestly in Q4 2012, used-car values are nearly 5 percent higher today than they were just one year ago, "even after normalizing for mileage and condition."

The senior market analyst of automotive insights went on to explain that the average one- to three-year-old used car currently has an auction value of $16,200 on average; up from $15,500 in January 2012.

"The annual increase in used-vehicle values largely can be attributed to the strength of 2011 model-year redesigns such as the Chevrolet Cruze, Hyundai Elantra and Chrysler 200," he said. "These vehicles remain highly desirable and have significantly outperformed the generation they replaced."

Again, despite the year beginning with wholesale values on a high note, the company does not expect this to continue, predicting rates to remain relatively flat in January before increasing slightly in February and March, "in anticipation of the spring selling season."

"Through the first quarter of 2013, analysts expect only a moderate increase of 0.5 percent in auction values, well short of the 2.5 percent increase during the first quarter of 2012," Gutierrez added.

And what is KBB attributing to this slowdown in price rate increase? The recent Hurricane Sandy shook up the industry, destroying upwards of 200,000 vehicles.

And though increase demand bumped up both sales volume and auction prices in the lanes in the affected areas directly after the storm, the change was not as drastic as initially expected, according to Gutierrez.

Now, any impact from the superstorm is expected to dissipate in the near future.

And perhaps, the decline has already begun. December 2012 values declined by 0.7 percent, which is within the range of historical seasonal depreciation, according to Gutierrez, who noted that during the month of December, values typically decline anywhere between 0.5 and 2 percent.

"Buying and selling activity at auction tends to die down late in the year as dealers focus more on selling
existing inventory rather than sourcing new product at auction. With replacement demand from the northeast seemingly satisfied, it appears as though values should remain relatively stable in the months ahead," Gutierrez concluded.
 

Sarah Rubenoff can be reached at srubenoff@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.