MCLEAN, Va. — Extreme winter weather during the first half of February had used-vehicle prices on track to grow only 0.7%. But improving weather during the second half of the month helped prices grow an additional 1.5 points to a total of 2.2% by month’s end, according to the NADA Used Car Guide’s March report.
The increase in used-vehicle pricing was in line with the NADA’s forecast of 2.1%. Additionally, the National Automobile Dealers Association (NADA)’s seasonally adjusted used-vehicle price index remained unchanged for the third month in a row at 124.6, tying August 2013, December 2013 and January 2014 as the third highest figure recorded.
At the segment level, price improvement was positive across all mainstream segments, with prices increasing between 1% and 3.2%. Per the seasonal norm, compact and mid-size car price growth outpaced all other segments at 3.2% apiece, which accounted for respective lifts of 2.8 and 3.2 percentage points over January’s final figures.
“While positive, the gains recorded last month in compact and mid-size cars are slightly lower than each segment’s respective five-year February average of 4.3% and 3.9%,” the report noted, in part.
Compact and mid-size utility prices grew by 2.2% and 1.7%, respectively, while mid-size van prices increased 2%. Toward the bottom of the mainstream pack, the firm noted, large pickups and SUVs recorded respective increases of 1.7% and 1.1%.
On the luxury side, utility prices increased for the first time in February since 2011, but the increase was a scant 0.3%. Luxury car prices, however, dipped by a slight 0.1%, which is on par with historical norms.
On an annual basis, wholesale prices ended the month 1% higher than they were in February 2013. Large pickup and SUV price growth continued to overshadow the rest of the market as their respective prices were 10.6% and 6.5% higher on a prior-year basis. Mid-size cars, utilities and vans rounded out the list of segments whose prices remained elevated compared to last year, up by a range of 0.4% to 3.2%.
Additionally, compact car prices were down by 0.1% from a year ago, while prices of compact utilities and their luxury segment counterparts were, on average, 0.6% lower than last year. Bringing up the rear was the luxury segment. That segment’s 2.4% decline added another month to the group’s 14-month streak of year-over-year losses.
Looking ahead, the NADA expects prices to rise an additional 1% in March before falling by an average of 2.5% to 3% per month from April through June. Last March, prices increased by a similar 1.2% but fell by a less steep average of 1.7% in the second quarter. “Last year’s more subdued rate of depreciation was due, in part, to the fact that prices grew less than usual over the first quarter,” the report noted.
At a segment level, prices are expected to increase 1% to 2% in March for vans and pickups (both mid-size and large), as well as for compact and luxury utilities. Growth for the remaining segments is forecasted to be less than 1%.
“In the second quarter, luxury car and mid-size utility and luxury compact utility prices are expected to drop close to the upper end of our forecast range, while mid-size and large pickup depreciation should remain below the overall market average,” the report stated. “Downward movement for other segments is expected to slot in between the former and latter groups.”