As October wholesale-price shifts fell in line with movements witnessed during the past five years, J.D. Power Valuation Services is expecting November readings to edge slightly lower.
And with the end of the year in sight, analysts also touched on where wholesale prices could land by the time 2018 closes.
Included in the latest installment of Guidelines, J.D. Power Valuation Services projected that wholesale prices for vehicles up to 8 years in age should decline by about 0.5 percent in November.
Meanwhile, analysts are thinking wholesale prices should finish the year up 3 percent versus the close of 2017, stemming in part because of “the exceptionally strong performances observed over the summer months.”
Looking even further into the future, J.D. Power Valuation Services is forecasting that wholesale prices will drift lower again in 2019, softening by 1.2 percent when compared to the end of 2018.
Reviewing October data
Prior to sharing its forward-looking assessments, the latest issue of Guidelines delved into the J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index and other notes from the firm’s October data.
Analysts indicated wholesale prices for vehicles up to 8 years old slid 3.1 percent in October; a movement on par with what they’ve observed during that month in each of the past five years. That price change pushed the index reading 1 point lower relative to September as the level came in at 120.6.
While the index softened in October, J.D. Power Valuation Services noted that its index reading is 2.8 percent higher year-to-date compared to the metric registered at this point in 2017.
“As expected, there wasn’t any noticeable strengthening in wholesale prices for the October period due to hurricane replacement demand,” analysts said in Guidelines.
Drilling deeper into the October information, J.D. Power Valuation Services noticed price movements at the segment level landed consistent with historic results within both the mainstream and luxury markets.
“Over the past several months, passenger car segments have outperformed their truck and SUV counterparts,” analysts said.
“However, this trend reversed in October as midsize and large pickup truck prices were some of the firmest on the non-premium side of the market,” analysts added, while mentioning that prices for those units dipped by a combined average of 2.2 percent.
Among cars, J.D. Power Valuation Services indicated large cars were the only price outlier to sustain a price movement higher or lower than 0.3 percentage points in October. The report noted large cars declined by 3.6 percent.
On the premium side, analysts surmised that price decreases in October were “relatively mild across the board,” while luxury large car prices ticked up for the second month in a row.
“However, this is an extremely low volume segment so any material change of one model can really shift overall segment results,” analysts said.
“Premium utility segment prices were generally firmer than both their mainstream utility and luxury car counterparts,” they went on to say.