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J.D. Power: Wholesale Prices Down in May, Auction Volume Growing

May’s wholesale prices for used vehicles up to eight years in age fell 1.7% from the prior month, a level that’s typical for this time of year, the firm stated in its June Used Car and Light Truck Guidelines report.

by Staff
June 20, 2018
J.D. Power: Wholesale Prices Down in May, Auction Volume Growing

Wholesale prices declined in May, while auction volume continues to grow. 

Photo by Eric Gandarilla. 

 

2 min to read


MCLEAN, Va. — Wholesale prices for used vehicles up to eight years of age fell 1.7% month over month in May, a level that’s typical for this time of year, according to J.D. Power’s June Used Car and Light Truck Guidelines.

Unlike other months where luxury vehicle values depreciate at a considerably higher rate than their mainstream counterparts, losses for both mainstream and luxury vehicles were relatively consistent.

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The heaviest depreciation on the mainstream side came from large utilities, which registered a 3% decline in wholesale price. Similarly — in the luxury segment — luxury large utility prices fell by 4.9%.

In terms of auction volume, volume increased 12% month over month and 2.6% year over year.

“Year-over-year volume continues to grow with each passing month, and as a result, there should be a transition soon where there is a more overall auction volume compared to 2017,” the report noted.

The largest volume gains are coming from the SUV segments, the report stated. Compact premium SUV volume is up 74.8% and large SUV volume is up 35.8%. The gains from these segments have still not swayed the pendulum of overall market share in favor of trucks, however. As of last month, cars make up 51% of auction volume while trucks make up the remaining 49%.

Wholesale prices are expected to decline 0.2% in June, according to J.D. Power. Meanwhile, used-vehicle prices are expected to increase by 0.8% by the end of the year. Factors that could negatively affect used vehicle prices include incentives, an anticipated increase in used supply, worsening credit conditions, and rising gas prices.

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Factors working in favor of higher used vehicle prices are strong labor conditions and strengthening housing prices.

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