Used-Car Prices Archives | Page 12 of 64 | Auto Remarketing

Black Book notices continued price retention strength shown by smaller cars

How this year’s atypical spring market is unfolding left its stamp again on Black Book’s latest depreciation update.

According to Black Book data, the average price of a used vehicle for model years 2012 through 2016 depreciated in value by 0.4 percent, an improvement from February’s level of 1.1 percent due to a continued stronger-than-expected spring selling season.

Editors noticed cars increased in value by 0.6 percent, while trucks decreased 1.1 percent. Black Book determined all vehicles are averaging a 12-month change of 15.0 percent.

For the second straight month, Black Book pointed out that sub-compact luxury CUVs showed the largest depreciation in March at 2.6 percent. In February, the reading was 2.8 percent.

Vehicles in sub-compact luxury crossover segment include the Audi Q3, BMW X1, Mercedes Benz GLA Class and the Mini Cooper Countryman. Vehicles in this segment finished March with an average price of $14,727, a 21.0-percent drop from year-ago levels.

Including sub-compact luxury CUVs, trucks represented the top five largest depreciating segments, including:

— Compact luxury CUV/SUV: down 2.5 percent
— Full-size crossover/SUV: down 2.3 percent
— Full-size luxury CUV/SUV: down 1.8 percent
— Mid-size luxury CUV/SUV: down 1.6 percent

Editors mentioned compact cars finished the month with the strongest retention with a rise of 2.5 percent. Vehicles in the compact car segment include the Chevrolet Cruze, Ford Focus, Honda Civic, Toyota Corolla, Volkswagen Jetta, Nissan Sentra and the Hyundai Elantra.

Vehicles in this segment finished the month with an average price of $8,012, just a 14.3-percent drop-off from a year ago.

Sub-compact cars (up 1.3 percent) and sporty cars (up 1.0 percent) also increased by at least one percent.

The only truck segment to show an increase during March was the compact crossover/SUV at 0.1 percent. Vehicles in the compact crossover/SUV segment include the Ford Escape, Chevrolet Equinox, Honda CR-V, Nissan Rogue, Toyota Rav4 and the Jeep Wrangler.

Vehicles in this segment finished March with an average price of $11,758, a 14.0-percent softening from a year ago.

“Spring continues to show a strong quarter for many smaller car segments, mostly because these vehicles are being offered at a great value at auction,” said Anil Goyal, executive vice president of operations at Black Book.

“This level of activity is expected to last just a few more weeks before depreciation trends return to a more normal pattern, particularly for cars,” Goyal added.

Strange spring: Car-price momentum remains intact

How odd has this spring been? Well, an entire weekend of Major League Baseball action was postponed because of significant snow in Minnesota, and it has been cars not trucks that are leading overall wholesale market price changes. So the answer is — pretty weird. 

This week’s Black Book Market Insights report reiterated how certain truck segments have pulled down the March Black Book Index despite a strong showing by small car segments so far this spring.

“Continued euphoria seen in the auction lanes as high sales percentages persist. Consignors of sedans, particularly rental car companies, have done well in this spring season,” said Anil Goyal, executive vice president operations at Black Book.

Volume-weighted, editors determined that overall car segment values increased by 0.15 percent last week. In comparison, Black Book reported market values for these units increased on average by 0.24 percent per week during the previous two weeks.

Within cars, Black Book noticed the midsize car segment increased the most in value last week, climbing by 0.60 percent or $48.

Again volume-weighted, editors determined overall truck segment values — including pickups, SUVs and vans — decreased by 0.16 percent last week, same as the average decrease per week spotted during the previous two weeks.

In the truck space, Black Book reported the sub-compact crossover increased the most in value last week, rising by 0.17 percent or $19. On the opposite extreme, editors pointed out a pair of truck segments dropped by notable figures. That couple included full-size crossovers and SUVs (down 0.70 percent or $139) as well as full-size luxury crossovers and SUVs (0.47 percent or $138).

Turning next to the anecdotes Black Book’s representatives collected from the lanes, the wintry weather still impacted some portions of the country led the conversations, staring with an auction general manager in Ohio.

“The past four to six weeks have been extremely strong, averaging 78 percent to 81 percent in sales conversion,” the GM told Black Book. “While we always get a bump from tax season, the fact we are now approaching two months of 80 percent is uncommon.

“Add in the inclement weather, and these numbers look even more remarkable,” the GM added.

Black Book also gathered observations from two of Ohio’s neighbors, starting in Pennsylvania, where the lane watcher said, “Volumes were down, causing dealers to experience difficulty sourcing cars. Trucks remain the hot commodity here.”

And up in Michigan, the story was, “The used retail market is definitely picking up at both the independent and franchise stores.”

Moving South, temperatures are improving, and so is the auction activity.

Out of South Carolina, “The market continues to be strong even though the attendance was down this week. In lane and online bidding and buying were good.”

And finally down in Texas, “There was active bidding and consistent sales but the number of consigned vehicles was down. Not sure if the good activity was due to the low number of vehicles to choose from or the seasonality of the spring market.”

Soft retail sales not slowing strong car-price run

Perhaps used vehicles aren’t rolling over the curb at a pace some dealers would like, but you couldn’t tell by the wholesale-price trends and auction-activity observations Black Book shared on Tuesday.

The latest Black Book Market Insights report indicated that cars have continued their strong spring cadence of auction sales and activity. Editors determined the majority of smaller car segments, along with midsize cars, again saw price increases this past week, while just a few truck segments generated increases.

“The spring market surge continues for small and midsize cars while most truck segments see a decline,” said Anil Goyal, executive vice president of operations at Black Book.

Volume weighted, Black Book reported that overall car segment values increased by 0.24 percent last week. The reading nearly mimicked what editors spotted the past two weeks as market values had increased on average by 0.25 percent per week.

Within cars, the compact car, midsize car, and sporty car segments increased the most in value last week, rising by $47, $42 and $47, respectively.

Again volume weighted, Black Book found that overall truck segment values — including pickups, SUVs, and vans — decreased by 0.12 percent last week. In comparison, the market values had decreased on average by 0.20 percent per week during the previous four weeks.

Among the trucks, the subcompact crossover and compact van segments registered the most increase in value last week, climbing by $28 and $38, respectively.

Turning next to what Black Book’s lane watchers reported back to headquarters, perhaps what percolated out of Colorado summarized the spring market best.

“The spring surge remains here as we are in a seller’s market. If you are buying vehicles, be prepared to pay the price for inventory,” the representative in Colorado said.

And the recap out of Massachusetts relayed a similar scenario.

“Retail is still not great here, but you wouldn’t know it by what the buyers are paying in the lanes. Prices are still strong across the board,” Black Book’s representative stationed in that commonwealth said.

Black Book’s three other anecdotes all surfaced out of the Midwest, with activities that might be common nowadays in other parts of the country, too.

From Michigan: “Anything in good, clean condition with below average mileage brings strong money. Sports cars are beginning to show up and are strong also.”

From Indiana: “The nicer units along with pickup trucks remain scarce at the auction. Prices are high, especially on the older units, due to tax season.”

From Wisconsin: “Very active bidding and selling. Late-model off-lease units are selling very well.”

Delayed tax refunds impact March wholesale prices

Based on how the flow of tax refunds impact the used-vehicle market, Cox Automotive wasn’t surprised by the movement of wholesale prices in March.

According to Manheim Used Vehicle Value Index — a measure of wholesale prices adjusted for mix, mileage and season — wholesale used-vehicle prices decreased slightly in March compared to February. But March prices climbed 5.4 percent from year-ago levels.

At 130.8, the index is at its lowest level since July 2017, a point just prior to when Hurricanes Harvey and Irma began to impact the market.

“The marginal price decline in March was not significant,” said Jonathan Smoke, chief economist for Cox Automotive. “The slight decline in the seasonally-adjusted index value was the result of the adjustment process expecting more of an increase in March, but delays in tax refunds have shifted the peak of used-car demand by several weeks.

“Looking ahead, we are expecting strong pricing in April and May, as tax refunds more fully impact the used-car market,” Smoke continued.

Delving deeper into the March wholesale data, analysts found several segments with prices moving higher.

In fact, Manheim noticed every vehicle segment posted wholesale price increases compared to last year, with an especially strong gain once again in vans. First quarter wholesale price trends for all segments included: 

— Compact car prices represent significant strength, with a 5.4 percent increase over 2017. That’s even more than the typically strong SUV/crossover segment.

— The midsize car segment was the weakest performer, but unlike previous quarters, the segment did not experience a decline, posting instead an increase of 0.9 percent over 2017.

— Pick-ups and vans both showed strength, with vans increasing significantly thanks to a 13.4-percent gain compared with March of last year. Manheim added that pick-ups had a comparatively modest increase of 5.5 percent.

 —Wholesale pricing for SUVs and crossovers underperformed the overall market, increasing 5.1 percent from last year. Analysts explained the underperformance is likely due to an increasing supply of used SUVs and more aggressive pricing and incentive spending on new inventory.

— Luxury car values once again underperformed the overall market, increasing 4.1 percent over the same period last year.

Also of note, Manheim determined rental-risk pricing strengthened in March, with the average price for rental-risk units sold at auction up 7 percent over last year and 4 percent compared to February.

Analysts added the average mileage of 45,000 for rental-risk units in March was 13 percent higher than last year.

Correlating the used-vehicle market with the tax calendar

After plowing through the March wholesale pricing data, Cox Automotive returned back to a discussion about IRS activities and a recap of how retail sales landed in March.

Historically, Cox Automotive acknowledged used-vehicle sales in the U.S. have peaked in the weeks following the peak in tax refunds. Starting in 2017, however, the IRS delayed the point when households with eligible tax credits could file tax returns. This resulted in refunds being delayed by approximately four weeks, impacting used-vehicle sales and pricing.

“This same situation is impacting 2018, as well,” analysts said.

Used-vehicle sales in March increased 1 percent over year-ago levels, according to Cox Automotive estimates, with the month’s seasonally adjusted annual rate (SAAR) for used vehicles rounding out at 39.5 million units.

Since 2009, the average March increase relative to February in the Manheim Used Vehicle Value Index has been 3.5 percent, just slightly higher than the March 2018 unadjusted increase of 3.4 percent.

Analysts explained the historical bump in March pricing has been driven by an increase in used-vehicle demand driven by earlier tax refunds.

“The seasonal-adjustment process still expects to see this historical pattern in used-vehicle values,” Cox Automotive said. “As a result, the seasonally adjusted value for March registered the slight 0.15 percent decline.”

Through the week of March 23, Cox Automotive mentioned the cumulative number of refunds in 2018 is down 1 percent compared to 2017.

“The weekly trend in refunds, however, relative to last year, is now trending up, with experts predicting a stronger price trend in April as retail used-car demand will likely peak for the year,” analysts added.

Meanwhile, on the new-car side, Cox Automotive recapped that new-vehicle sales increased 6 percent year-over-year in March, coming in far stronger than forecast and surprising most analysts and experts.

The March 2018 new-vehicle SAAR of 17.4 million, up from 16.7 million in 2017, marked the seventh straight month of more than 17 million SAAR and the third best March on record.

“Cars continue to experience sharp declines in the market, with sales last month falling 9 percent compared to year-earlier levels. Trucks and SUVs continued to gain share,” analysts said.

The latest commentary from Comerica Bank also touched on new-vehicle sales, noting how challenging it is to project future figures.

“Forecasting auto sales is now a two-handed argument,” Comerica Bank chief economist Robert Dye said.

“On the one hand, strong economic conditions are supportive of ongoing auto sales,” Dye continued. “On the other hand, sales were declining through the first eight months of 2017, then came the surge in sales in September as a result of hurricane damage along Gulf Coast.

“We expect to see gradually easing auto sales this year,” he added.

Trends and economic momentum

Cox Automotive closed its latest index update by noting some general economic news.

Analysts mentioned the fourth quarter's real GDP growth rate was revised upward to 2.9 percent from its previous 2.5 percent.

“Expectations remain for a continuation of accelerated growth this year due in part to increased consumer spending and business investment resulting from recent tax reform,” Cox Automotive said.

“Despite consumer confidence last month experiencing a moderate decline from a 17-year high in February, largely due to stock market volatility, consumer spending expectations remain high due to tax cuts, strong wage growth and the robust labor market,” the company went on to say.

Dye also discussed an important component in dealerships turning vehicles — their customers having a job to generate income and pay their installment contract.

Dye explained the official federal employment data for March was “eye-catching” as firms increased employment by just 103,000 jobs on net, “well below consensus expectations” of about 185,000 for the month. He pointed out the miss in March payrolls comes on the heels of a robust 326,000 job gain in February.

“The March slump looks like mean reversion right now,” Dye said. “If it is followed by a weak April, that is another story, but other indicators point to ongoing moderate job growth this spring.

“The unemployment rate stayed at 4.1 percent for the sixth consecutive month,” he continued. “We still expect it to edge lower, but the rate of decline has clearly eased.

“Average hourly earnings increased by 0.3 percent for the month and are up 2.7 percent over the previous year,” Dye went on to say.

Healthy spring not reflected in latest Black Book index

What dealers are experiencing in the lanes during the spring market didn’t exactly show up in the latest Black Book Used Vehicle Retention Index.

Black Book released its Used Vehicle Retention Index for March on Thursday, showing that it fell 1.2 percent for the month to register at 112.0, down from the February reading of 113.3.

Editors calculated the index has now softened by 0.9 percent during the past 12 months.

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as percent of original typically-equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.

Despite a healthy start to the spring selling season, Black Book acknowledged the index still saw a slight dip from the previous month. Black Book discussed how strong car prices have been in this report.

The latest index update reflected how small car segments saw increases during the month, such as compact cars (up 1.4 percent) and subcompact cars (up 0.8 percent). Segments showing declines included full-size crossover/SUV (down 1.7 percent), compact crossovers (down 0.9 percent), and full-size pickups (down 1.2 percent).

“We continue to see pockets of increases in the Index, with particular concentration on car segments that have been in demand throughout the spring selling season,” said Anil Goyal, executive vice president of operations at Black Book.

“We’re continuing to keep an eye on evolving trends in truck segments that have shown stable price increases in the recent years, but are now starting to show declines,” Goyal continued.

The index dates back to January 2005, where 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.

Kontos pinpoints 2017 used-sales total and February wholesale price shifts

Along with recapping some of the full-year used-vehicle metrics he discussed during NADA Show 2018, KAR Auction Services chief economist Tom Kontos also pinpointed wholesale price movements for February.

According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale used-vehicle prices in February averaged $10,707, which was 2.5 percent lower compared to January and 0.2 percent higher relative to February 2017.

Kontos noted that sporty cars made the highest price jump in February, climbing by 4.5 percent.

He added that decliners were paced by full-size cars, which softened by 6.6 percent.

According to his presentation shared during the annual event hosted by the National Automobile Dealers Association, there was a 2.0-percent lift in used-vehicle transactions in 2017. The combination of turns at franchised and independent stores as well as deals made by private parties resulted in 41.38 million used-vehicle sales last year, according to Kontos.

The 2017 figure represented a jump of 827,000 units, with private sales constituting more than half of that amount. Here is a breakdown of the full-year figure:

— Sales at franchised dealerships: 15.1 million

— Sales at independent dealerships: 14.1 million

— Private party transactions: 12.1 million

Also of note within Kontos’ NADA material, the KAR expert mentioned how 2017 also marked a significant drop if sales into rental fleets. Last year, the industry saw a drop-off of 12.3 percent or 222,544 units go into the rental market.

Still, Kontos indicated automakers still sent 1,592,380 new vehicles into rental fleets in 2017.

And one other full-year metric Kontos shared focused on sales volume by seller type. Fleet/lease consignors posted a 10.3 percent year-over-year volume lift in 2017 while manufacturers sustained a softening of 14.7 percent. Kontos also pegged dealer consignment volume as being down by 4.0 percent year-over year.

“Dealer consignment volumes are down as dealers take fewer new-car trades,” Kontos said in his presentation. “Declining manufacturer volumes reflect lower rental sales and recall delays. Off-lease and repo volumes are reflected in growing fleet/lease sales.”

Source: ADESA Analytical Services.

Lane watch: Car prices stay strong

Along with its monthly update on the specialty markets, the latest Black Book Market Insights report showed that cars are seeing gains they haven’t reached in a while.

Editors noticed only two car segments — luxury and premium sporty — declined this past week. Editors added that a few truck segments also saw gains, but most were in decline.

“Two weeks of positive changes in car values as springtime buying continues with full force,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, Black Book determined overall car segment values increased by 0.23 percent last week. In comparison, the market values had increased by 0.26 percent during the previous week.

Within cars, editors indicated all non-luxury segments performed well with values seeing an increase ranging from $21 to $47.

Again volume-weighted, Black Book reported that overall truck segment values (including pickups, SUVs and vans) decreased by 0.20 percent last week, slightly worse than when editors spotted a decrease of 0.19 percent in the prior week.

In trucks, editors said the compact luxury crossover/SUV and full-size pickup segments performed the worst.

Turning next to what Black Book’s representatives in the lanes noticed, one upbeat anecdote came an auction general manager in Texas.

“The last two weeks have been really, really good for our auction. We have had good vehicle volumes, and for two straight weeks our sales percentages have been in the mid-60s,” the auction GM told Black Book’s lane watcher.

Another positive development percolated in Florida.

“The rental and off-lease lanes always do better than the dealer lanes, but today they performed even better,” Black Book’s representative in the Sunshine State reported. “The dealer reps were holding out for more money, which hurt their sales percentage.”

The other three observations collected by Black Book showed how diverse the auction space can be on sale day.

— From Pennsylvania: “We had a mixed bag with an abundance of passenger cars and a shortage of trucks. This imbalance caused truck prices to be really strong.”

— From Colorado: “There were fewer vehicles to choose from today, which pushed the values up from previous weeks. Our market remains strong.”

— From Wisconsin: “The sales percentage was good, even though both buyers and sellers seemed to be more selective.”

Update on the specialty markets

As they do at the top of each month, Black Book editors assembled their analysis of the specialty markets. Here is what they had to share:

— Collectible Cars: The main events of the Amelia Island Concours d’Elegance were supported by auctions hosted by RM Sotheby’s, Bonhams, Gooding, Hollywood Wheels and Motostalgia.

— Recreational Vehicles: RV values at auction, including all towable and motorized vehicle segments, increased last month.

— Powersports: After last month’s rather large, but uneven, gains, the powersports market settles into a more typical pattern of price adjustments as spring has officially begun.

— Heavy Duty: New truck orders, primarily over the road and regional tractors, are at a high level and lead times are increasing for the current year.

— Medium Duty: This past month, Black Book saw wholesale prices drop a little more than we experienced in January and February, returning to a more normal monthly depreciation. Late model units (2015-2016) dropped an overall weighted average of $254 (0.6 percent).

Black Book spots strongest week for used cars in 2 years

Americans still have about two weeks to file their federal income taxes with the Internal Revenue Service, but consumers who already have completed the process are leaving an impact in the lanes.

The latest Black Book Market Insights report highlighted that the market for cars — particularly smaller models — continues to strengthen throughout the spring season to that point editors declared last week was the strongest week for used cars in two years.

“Very strong week in car values led by compact cars. Tax season demand continues to be strong,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, Black Book indicated overall car segment values increased by 0.26 percent last week. In comparison, the market values had decreased on average by 0.11 percent per week in the previous four weeks.

As Goyal mentioned, the compact car segments increased the most in value last week, rising by 0.89 percent or $61.

Volume-weighted, editors determined that overall truck segment values — including pickups, SUVs and vans — decreased by 0.19 percent last week. In comparison, editors pointed out the market values for trucks had decreased on average by 0.22 percent per week during the previous four weeks.

Within trucks, Black Book found that the sub-compact crossover segment increased the most in value last week, ticking up by 0.18 percent or $20.

Turning next to what Black Book’s representatives stationed at auctions across the country observed, two particular trends surfaced in the Southeast.

Out of Georgia, the lane watcher reported, “There was a good crowd and the demand was strong, which resulted in very few no-sales. I had one dealer tell me that he was looking to purchase in excess of 30 vehicles at the auction.”

Meanwhile down in Florida, “Off-lease and rental vehicles performed well, as did units in the $10,000 price range.”

Moving north to Pennsylvania, used-car managers find themselves in a bit of a quandary.

“There is an imbalance with the supply/demand equation here. Dealers continue to complain that they can’t find enough vehicles for inventory,” Black Book’s representative shared.

Finally out West, the situation is rather upbeat, too.

The report out of Nevada indicated, “The market here is good. We are experiencing very high activity levels both online and on-site.”

And the mood in Colorado was, “We had another strong sale here with more vehicles selling without regard to the vehicle type or make.”

Black Book valuations chosen for Roush Performance Products

In other company news, Black Book announced this week that the firm has signed an agreement to provide vehicle valuation data for ROUSH Performance Products, a company offering an extensive line of aftermarket performance parts, vehicles and crate engines.

ROUSH Performance blends Jack Roush's legendary racing successes with the formidable OEM engineering and manufacturing skills of ROUSH Industries and its more than 4,000 employees. ROUSH Performance is the first specialty-vehicle company to combine race-proven technologies with advanced automotive engineering.

ROUSH dealers can now leverage Black Book’s legacy of accurate vehicle valuations, available on the Black Book Digital mobile application or online.

With Black Book’s valuations, ROUSH dealers can instill trust in their customers that their transaction comes with an accurate, fair value. Dealers can also fully finance the purchase of a new ROUSH vehicle, offering credible value to lenders and making it easier for buyers to gain financing.

Lastly, Black Book wants to enhance satisfaction levels for ROUSH vehicle owners helping them achieve fair value for their vehicles when they’re ready for resale.

“We’ve always taken pride in the supreme quality of vehicles our dealers offer their customers, and with Black Book we take extreme pride in the quality of our deals,” said Jack Roush Jr., who oversees advanced business strategy at ROUSH. “Our customers want to know they’re getting the best vehicle on the road today, and they also want to know it comes with the most accurate valuation in the industry.”

Jared Kalfus, executive vice president of revenue, for Black Book, added, “We’re excited to offer our trusted vehicle valuation data and services to an industry icon in ROUSH, known for high performance vehicles.

“The ROUSH name is synonymous with trust and quality, and we’re proud to know that Black Book’s values will help enhance their customer relationships even further, solidifying that trust between the dealer and customer,” Kalfus went on to say.

Consumer interest in SUVs, trucks keep residuals at a healthy rate

According to the Edmunds Used Car Report, SUVs and trucks made up 47 percent of sales of 3-year-old vehicles in 2017. And in total, off-lease supply boosted the used market to reach 39.2 million sales last year — a record high.

And as increases in off-lease supply begin to put long expected pressure on residual values, this trend in large-vehicle sales is helping the used market absorb the high volume of off-lease and prior rentals in “an interesting manner,” Edmunds analysts shared.

The report points out that trends are defying the norm. In most cases, used prices and days-to-turn go hand-in-hand, because lower-priced vehicles normally sell quicker.

But healthy sales of pre-owned SUVs and trucks are resulting in a decrease in days-to-turn and an increase in price, Edmunds analysts explained.

Some of the car-based segments are showing more of what is expected: lower days to turn, driven by lower values.

“While this isn’t the ideal scenario for the passenger-car segments, at least they’re not experiencing an increase in days to turn as well as a decrease in values, which would signal a larger crisis for cars,” the Edmunds report states.

And trends in the SUV and truck market served to keep the recent influx of used supply from putting too much pressure on residual values.

Prices rose by just 1.4 percent last year, according to the report. That’s after spiking by an average of 3.6 percent every year from 2012-2016.

“Consumer demand for SUVs — which were limited in supply — is really what helped fuel the modest price growth that the used market eked out in 2017,” said Ivan Drury, senior manager of industry analysis at Edmunds.

Trends within the rental companies will serve to keep healthy residuals going a bit longer, as consumer preferences for SUVs and trucks are evident in this sector, as well.

“As rental companies begin to purchase these vehicle types to appeal to consumers and replace vehicles that are out of commission due to accident or repair, they’re also helping to mitigate losses on the residual end,” the Edmunds report pointed out.

On top of racking up more SUVs and trucks for interested consumers, Edmunds reported rental agencies are also buying vehicles that go for an average of $3,200 over the starting MSRP.

“This is a winning strategy for both OEMs and consumers: Rental customers get to enjoy more creature comforts in their vehicles, and automakers are able to better protect residual values and give customers a more favorable impression of their brands,” Edmunds concluded.

While February falls short, March wholesale price forecast reflects uptick

February wholesale prices didn’t hold up quite as much as the analyst team at J.D. Power Valuation Services expected. But the group thinks March performance will fall in line with what the firm typically has seen during the third month of a year.

According to the latest installment of Guidelines, March wholesale prices for vehicles up to 8 years old are projected to increase by 1.2 percent. Should that forecast hold, it would be nearly identical to the 1.6-percent lift analyst recorded during March of last year.

J.D. Power Valuation Services also is standing pat on its full-year price prediction, saying the prices are likely to dip by 1.5 percent by the time 2018 concludes.

Meanwhile, in February, analysts indicated February wholesale prices “weren’t quite as strong as originally anticipated,” as they edged 0.2 percent lower year-over-year. The February figure still was an improvement over what J.D. Power Valuation Services spotted in February 2017 when analysts recorded a 0.9 percent softening.

The latest price movement left the J.D. Power Valuation Services Seasonally Adjusted Used Vehicle Price Index at 114.5 in February, representing an uptick of 0.2 percent.

For the second month in a row, analysts discovered that the large utility segment experienced the largest wholesale price drop within the mainstream side of the market. J.D. Power Valuation Services pegged the February decline at 2.1 percent. Last February, this segment sustained a 1.6 percent decrease. Driving the recent drop is a 26.7-percent jump in auction volume for these units.

J.D. Power Valuation Services also mentioned large pickup prices now have declined for five consecutive months courtesy of a 0.6-percent softening in February.

Conversely within the mainstream side, analysts noted compact car prices ticked up by 0.8 percent as prices stayed strong for midsize cars “because of federal tax returns.”

Per the Internal Revenue Service, J.D. Power Valuation Services relayed that the total number of federal tax refunds issued through mid-February sat 2.9 percent lower than at the same juncture last year. But the IRS noted that the average refund of $3,169 is 1 percent higher year-over-year.

“As a result, there were likely fewer of these shoppers in the marketplace last month armed with down payments,” analysts said in the latest Guidelines.

Moving over the premium side of the wholesale space, J.D. Power Valuation Services indicated that segment losses were led by luxury compact utilities, which suffered a 2.4-percent price reduction in February.

While analyst spotted other luxury segment with roughly a 2-percent price decline in February, they also pointed out that luxury large car prices actually rose 1 percent.

“Over the past five Februarys, prices for the segment have decline by about 5 percent,” J.D. Power Valuation Services said. “It’s important to remember this is an extremely low-volume segment so any significant price movement from month-to-month on any model can have a powerful impact on the group’s overall price movement.

“An example of this would be the 3.7-percent increase in 2014 and 2015 Hyundai Equus wholesale prices observed over the period,” the firm added.

David Paris, executive analyst at J.D. Power Valuation Services, discussed market trends in a video available here as well as at the top of the page.