Along with aligning with another online marketplace connecting buyers and sellers of used vehicles, Black Book watched its Used Vehicle Retention Index rise in November, pushing the reading higher for the third consecutive month.
Editors indicated the November index reading increased 0.3 percent month-over-month, ticking up from 114.6 to 115.0. The movement triggered the third straight monthly increase dating back to August when the index sat at 112.6.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on two- to six-year-old used vehicles, as a percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.
Black Blook explained that the index rising for the third straight month gives used cars and trucks relative strength heading into the final month of the year. The index has increased in five months during 2017, with a sixth month unchanged (June to July).
It’s the first time since 2013 that the index increased at least five times during the calendar year. Back in 2013, the index increased six times.
Editors noticed nine segments saw increases in the index during November, including:
—Compact crossover/SUV
—Full-size car
—Full-size pickups
—Full-size vans
—Luxury cars
—Midsize crossover/SUV
—Midsize luxury crossover/SUV
—Prestige luxury cars
—Small pickups
“The continued strengthening of the index indicates 2017 has been a little stronger than expected for used cars and trucks, helped along the way by the hurricane replacement activity,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book.
“Any continued strengthening over the next few months will mean we’re getting an early jump at the oncoming tax spending season, when consumers use their checks to replace their vehicles in the spring,” Goyal continued.
The index dates back to January 2005 when Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1 percent, while during 2016 the index fell by just 6.4 percent. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index, go to this website.
Latest weekly update
Along with sharing the month index, editors also released this week’s Black Book Market Insights report, which mentioned that compact cars sustained their highest depreciation in the past 26 weeks.
Overall according to volume-weighted data, Black Book indicated car segment values declined by 0.66 percent last week. In comparison, car values decreased on average by 0.57 percent per week during the previous four weeks.
Within cars, editors found that sub-compact car and compact car segments performed the worst, decreasing by 1.12 percent and 0.86 percent, respectively.
Moving over to the volume-weighted information for trucks, Black Book reported overall values (including pickups, SUVs and vans) declined by 0.34 percent last week. Truck values softened on average by 0.43 percent per week during the previous four weeks.
For trucks, editors determined the sub-compact crossover segment performed the worst, decreasing by 1.38 percent.
As far as what Black Book’s representatives in the lanes uncovered, it seems dealers are still struggling to find certain kinds of inventory.
Beginning in Arizona, Black Book’s lane watcher said, “The sale was low on inventory, which kept the prices fairly stable.”
Down in Florida, the report was, “Dealers need clean vehicles, but there weren’t that many here. The late model units struggled to make the set floor prices.”
And up in Pennsylvania, “Not enough truck supply here today to satisfy the demand,” was the focus of the Black Book recap.
Finally, another development surfaced in Colorado with the representative stating, “We had a pretty decent sale here thanks to the online buyers. The in-lane attendance continues to decline.”
Black Book to share vehicle data with Carable
In other company news, Black Book announced this week it has signed a partnership agreement with Carable, a unique peer-to-peer used-vehicle marketplace that connects individual buyers and sellers of cars and trucks. Black Book is providing all vehicle valuations for sellers listing their vehicles in the online marketplace.
“An accurately priced vehicle is always the key to connecting buyers and sellers,” Carable founder Patrick Juthberg said. “Carable is truly unique in the auto industry, and our success depends on resources such as Black Book for an efficient and transparent online marketplace.”
Jared Kalfus, senior vice president of sales and marketing at Black Book, added, “Millions of consumers today are accustomed to buying and selling goods online, therefore a marketplace such as Carable is a natural fit for people looking to buy and sell vehicles.
“We’re pleased we can contribute to such a unique marketplace with the most accurate values in the industry, thus ensuring a fair transaction for both sides and offering Carable a chance to realize repeat business as more people utilize the service,” Kalfus went on to say.
This week, our episode is a chat from earlier this fall with George Chamoun, the chief executive officer of ACV Auctions.
An entrepreneur, Chamoun launched technology and services company Synacor with his college roommate in 1998, shortly after graduating college.
Check out the conversation below.
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Be it a car or truck, Black Book saw both general vehicle segments depreciating at almost the same rate as auctions and dealers celebrated Thanksgiving.
According to this week’s Black Book Market Insights report, editors determined sporty cars and compact vans saw the most depreciation out of both segments, dropping by 0.82 percent and 1.31 percent, respectively.
“Normal seasonal depreciation continues for sporty cars. Commercial compact vans are depreciating faster than the full-size vans,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.
Looking at volume-weighted data, Black Book indicated overall car segment values decreased by 0.48 percent last week, lower than the average weekly decrease of 0.54 percent in values recorded during the previous four weeks.
Volume-weighted truck segment information showed that values for pickups, SUVs and vans softened by 0.49 percent last week. That figure is higher than the average weekly decrease of 0.36 percent in values editors posted during the previous four weeks.
Likely not because of any drowsiness triggered by that Thanksgiving turkey, Black Book’s representative in the lanes uncovered reasons why dealers aren’t moving as much used metal as they would like, which is impacting the lanes at auction.
The first instance of this trend surfaced in Tennessee where Black Book’s representative shared, “Retail is slow on both new and used in our area, causing our wholesale market to sputter after a pretty good fall run.”
In Pennsylvania, a similar story unfolded as the lane watcher relayed, “The number of vehicles sold was noticeably lower today. Dealers commented that we should expect this through the end of the year.”
And in the Northwest, Black Book’s auction visitor mentioned a specific reason why dealers are hesitant to load up on used inventory.
“A used car manager from a new-car store stated that Incentives are really starting to put a strain on his late-model used market,” the lane watcher stationed in Washington said.
Down the West Coast, the seasonal trends of the wholesale market surfaced.
“A national remarketer commented that the end of October seemed to signal that we are pushing toward the seasonal normalcy in the market after a really good late summer/early fall run,” a Black Book resprenstative in California reported.
Up in Michigan, where signs of winter are clear, a lane watcher said, “Four-wheel-drive trucks are still selling well. This is a typical market trend here during late fall when hunting season kicks in and snow and ice lurks.”
Manheim has announced a 100-percent sales rate following the exclusive off-site auction for Citroen its Nevada team recently held in Las Vegas in collaboration with Manheim Online in the U.K.
The Las Vegas auction follows the successful unique off-site sale Manheim and Citroen held 'at sea' last year on No Man’s Fort, a 150-year-old facility off the coast of the Isle of Wight near Portsmouth, England.
This year, 23 Citroen dealer representatives flew from the U.K. to Manheim’s Las Vegas auction center to attend the event.
“We are incredibly pleased with the success of the Manheim Nevada event. Taking them to Las Vegas was a fantastic opportunity to build on our reputation for providing the best service to our dealers,” Citroen UK remarketing manager Paul Drake said in a news release.
“The feedback was extremely positive, and all dealers were fully engaged with, and purchased all vehicles on offer, which is a fantastic result. We would like to thank the Manheim U.K. and U.S. teams for organizing an incredible, unique and memorable five days for both Citroen U.K. and the dealer network,” Drake continued.
Each of the 125 Citroen used-vehicles offered at the Nov. 10 auction was sold at 102.88-percent CAP, which is approximately 4.5 percent higher than current market conditions, according to Manheim.
“Our off-site sales are always spectacular and showcase our ability to provide market leading service around the world,” added Tim Hudson, managing director of inventory solutions at Cox Automotive.
“Having partnered with Citroen UK for off-site sales since 2015, we are thrilled that the Nevada event was such a success. Our team was outstanding, and we look forward to next year's location.”
No matter which way the analysts at RVI Group looked at October wholesale prices, they noticed increases versus September’s readings as well as from year-ago figures.
The RVI Used Vehicle Price Index (Real) increased from September to October by 2.0 percent. When compared to October of last year, prices rose by 1.1 percent.
The firm’s Used Vehicle Price Index (Nominal) climbed by 2.1 percent in October versus September. That index also increased by 3.0 percent year-over-year.
Analysts pointed out that used-vehicle prices also are up on a year-over-year basis for more than half of vehicle segments, with full-size pickups leading the way at 3.9 percent.
Also making notable upward year-over-year movements in October were full-size vans (up 3.2 percent), sports cars (up 2.3 percent) and midsize SUVs (up 1.7 percent)
Conversely, small pickups paced the declines in October as prices for these units softened by 3.5 percent. Only one other segment sustained a year-over-year decline greater than 1 percent in October; subcompacts at 1.1 percent.
There was a slide in late-model auction volume during October, but through 10 months of 2017, the numbers remain ahead of year-ago figures.
That’s according to the latest Guidelines report from J.D. Power Valuation Services.
The report indicates there was a 2.1-percent month-over-month slide in late-model auction volume during the month. Compared to a year earlier, October’s volume was down 4.4 percent.
However, year-to-date late-model auction volume is up 4.2 percent, J.D. Power said.
Trucks and SUV segments are among the highlights of that year-to-date growth.
That said, cars are taking a 54-percent share of volume, with trucks at 46 percent, the company said. The opposite has been true in new vehicles.
Along with recapping what happened in October, the analyst team at J.D. Power Valuation Services projected how wholesale price trends might land in November.
Analysts didn’t just photocopy their reports for the November issue of Guidelines, but the figures certainly were similar.
J.D. Power Valuation Services is expecting wholesale prices for vehicles up to 8 years old to decline by approximately 2.4 percent in November. That projection marks a bit of an improvement from the 3.1-percent decline analysts recorded during the same month last year.
“At the segment level in general, car losses are still expected to outpace those of trucks and SUVs,” analysts said in the report.
Considering a full-year forecast, J.D. Power Valuations Services has its expectations at a 5.4-percent wholesale price decline; again a bit of an improvement because of the impact from Hurricanes Harvey and Irma.
Looking further ahead, analysts suspect that losses should decelerate in 2018, landing below 3 percent.
As far as how the October numbers settled, J.D. Power Valuations Services pinpointed that wholesale prices dropped by 2.2 percent, reflecting price support as replacement demand from the hurricanes kept dealers and consumers on the hunt for vehicles.
During the past five years, analysts pointed out that October’s price softening typically came in at about 3.2 percent.
As a result of what analysts called a “solid” performance in October, the J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index increased for the third month in a row. The reading rose by 1.1 points to come in at 114.5.
Through the first 10 months of the year, the index is down 6.2 percent compared to the same period in 2016.
Drilling down to the segment level, the report mentioned mainstream car losses were directionally in line with “the status quo” in October.
Subcompact cars headlined the declines with a drop of 4.6 percent in October, outpacing the average decline for the month of 3.8 percent that analysts spotted during the past five years.
Not far off that pace, analysts noticed midsize van prices dipped by 3.7 percent. However, during the past five years, prices for these units have dropped by 4.2 percent on average in October since 2012.
While large pickups had generated an extended price strength streak, J.D. Power Valuation Services determined prices for these units softened for the second straight month in October, sliding by 2 percent. That figure was the most significant price drop for large pickups recorded so far in 2017.
Switching over to luxury units, analysts described trends in this space as “mixed.”
Large luxury utilities dropped the most in October as prices for these models slid by 4.1 percent, which happened to be 2 percentage points more than what analysts have seen in October during the past five years.
Finally, large luxury cars decreased by nearly an identical figure, dropping by 3.8 percent.
A company that had spent close to five years working on a logistics management tool designed to meet the vehicle remarketing needs of charities is now offering its services to auto auctions, as well.
AudoServ, which is a donation remarketer, partnered with Auction Edge and AutoIMS and added 180 independent auctions to its platform.
The company announced these technical integrations in a news release Tuesday.
“Our legacy system helped us prove the need for increased efficiency and transparency for vehicle donors, charities, auctions, scrap yards and transporters,” AudoServ president Jason Cotton said in the release. “After a number of years, and diminishing support for that system, we made the deliberate decision to start over from scratch.
“It was clear from the start that using existing industry partners was the right path to supported software with a broad reach and proven track record," he said.
AudoServ has been fine-tuning its technology and approach for years, and now gives charities access to up to 180 independent auctions. This is boosted by what the company called a “low-cost centralized vehicle distribution network,” which is powered through Auction Edge and AutoIMS.
AudoServ worked with both companies on the integrations. “It was a great experience working with John Green, Kathy Williamson, Joe Miller, and Keely Smith. The knowledge, and dedication of these industry professionals is unbelievable,” Cotton said.
He added: “We have designed AudoServ to handle the complex issues related to managing the donation process, but have kept it easy to implement and use.”
AudoServ said it is working to integrate with several large-scale charities and auto recycling companies. It is also accepting applications from independent auctions to be AudoServ Network partners.
“In creating AudoServ, we understood the influence it could have within our industry, and are excited to see our partners recognize how easy it is to use,” Cotton said.
More information can be found at AudoServ.com or by emailing [email protected].
Get ready for turkey and softer prices in the lanes.
This week’s Black Book Market Insights report showed that used-vehicle value depreciation hit an all-time weekly high for 2017. Editors indicated sub-compact luxury crossovers saw the largest decrease in values last week, dropping by 1.25 percent. A close second, minivans saw the next-highest depreciation, falling by 0.94 percent.
“A great deal can change with values over a few weeks. Many segments are rapidly shifting toward seasonal high declines,” Anil Goyal, senior vice president of automotive valuation and analytics at Black Book, said.
Looking at volume-weighted data, editors found that overall car segment values decreased by 0.67 percent last week, the highest weekly average depreciation rate for cars this year.
Black Book added that the midsize and near luxury segments also had their respective highest weekly depreciation rates of the year at 0.90 percent and 0.89 percent, respectively. The compact segment followed closely with a near-high at 0.82 percent.
Again reviewing volume-weighted information, editors determined overall truck segment values — including pickups, SUVs and vans decreased by 0.5 percent last week, the highest weekly average depreciation rate since January.
Black Book went on to mention the sub-compact luxury crossover segment had the highest weekly depreciation rate at 1.25 percent. The minivan and full-size crossover/SUV segments had their highest declines this year at 0.94 percent and 0.91 percent, respectively.
Turning next to what Black Book’s representatives in the lanes last week, two of the most notable anecdotes originated out of California.
“A major national remarketer reported that his vehicles brought the highest values in many, many years in October 2017. He also stated that he has seen the values begin to slip in November and expects the softness to continue into early 2018,” one late watcher in the Golden State reported.
Another report surfacing out of California added, “Lots of no-sales in most of the lanes. Only a couple of remarketers had lowered their floors enough to sell at a high percentage.”
Sliding over the Rocky Mountains, the report out of Colorado included details that likely won’t surprise dealers.
“Trucks and SUVs remain in demand, which is not unusual for our market, especially in the fall,” the Black Book representative stationed in Colorado shared.
In the Midwest, another specific segment kept ringmen busy.
“The nicer vehicles are still in demand and sell, but there was more interest than normal in the higher mileage vehicles. Dealers are having difficulty sourcing the really good condition vehicles in the luxury segment,” Black Book’s lane watcher in Indiana said.
Finally, wrapping up in Georgia, the representative said, “Mid-size and sporty cars were selling well, but most of the attention was still on the trucks and SUVs.”
Chase Auto Finance honored its 19th annual Chase Cup for Auction Excellence winners at the NAAA Convention in La Quinta, Calif. last week, which was held in partnership with the National Remarketing Conference portion of Used Car Week.
Likewise, also at the convention, NextGear Capital honored another four auctions with the presentation of its fifth annual Auction Partners Awards.
Below is a recap.
Starting with the Chase awards, Manheim Minneapolis was announced the winner of the Best National Auction Performance and Manheim Seattle has earned the Douglas F. Wininger Memorial Award for Best National Performance Service Delivery, which recognizes outstanding service in measurable areas related to transportation management, sales, invoicing and other operational measures.
“Each year, the Chase Cup aims to honor high-performing auto auctions across the country that display operational excellence, outstanding customer service and strong financial performance.” Chase Auto Finance head of vehicle remarketing Andrew Carlstrom said in a news release. “These auctions are the best of the best.”
Manheim Minneapolis showcases strengths in vehicle reconditioning, number of buyers, condition report accuracy, and monetary results, according to Chase.
In addition to its Best National Auction Performance award, the auction is also a Best Regional Performance award winner for the Midwest.
Chase said it reviewed a total of 32 national auto auctions based on preparation, sales, invoice processing, transport requests, title processing and other capabilities.
Chase also recognized the following auctions for top performance in 8 categories:
- Best National Jaguar Sales – Manheim Dallas
- Best National Land Rover Sales – Manheim Riverside
- Best National Mazda Sales – Manheim Seattle
- Best National Subaru Sales – Manheim Seattle
- Best Regional Performance, Western – ADESA Golden Gate
- Best Regional Performance, Central – ADESA Kansas City
- Best Regional Performance, Northeastern – Manheim Pittsburgh
- Best Regional Performance, Southeastern – Manheim Orlando
NextGear Capital awards 4 partners
Moving over to the NextGear awards, the company recognized three auction partners with an Operational Excellence Award, for efficient sales retention, operational performance and responsiveness to the company.
The three winning auctions include Dealers Auto Auction of Anchorage, Alaska, South Bay Auto Auction of Gardena, Calif. and DAA Northwest of Spokane, Wash.
“Independent auctions are at the heart of the independent dealer industry, and provide invaluable support and services to our clients,” NextGear Capital senior vice president of operations Randy Dohse said in a news release.
“We deeply value those auction partners that demonstrate operational and remarketing excellence.”
Additionally, a Remarketing Excellence Award was also presented to DAA Mobile of Mobile, Ala. for demonstrating the highest percentage of sales recovered based on valuation percentage of each vehicle and the best sales follow-up.
