Wholesale Prices Improve Again in April
AuctionNet wholesale prices improved again in April, a result that was in line with the National Automobile Dealers Association’s prediction that used prices would peak during the middle of the month.
McLEAN, Va. — AuctionNet wholesale prices improved again in April, a result that was in line with the National Automobile Dealers Association’s prediction that used prices would peak during the middle of the month. However, overall appreciation was significantly less than the jump seen in March and prices began to decline mildly in the latter half of the month.
On a mileage and mix adjusted basis, wholesale price growth for vehicles up to five years in age came in at 0.6 percent or $102 in April, which was a sharp 3.5 points back of March’s growth of 4.1 percent, according to the association’s May edition of the Official Used Car Guide.
Moderating gasoline prices, which fell measurably for the first time since December after peaking in early April, helped to temper compact and mid-size car appreciation for the month. Price growth for the two segments equaled 2.1 and 0.4 percent, respectively.
Other notable movement for the month involved large pickups, mid-size vans, and luxury cars.
In the case of the large pickups, although wholesale prices for classes 1–3 fell by a slight 0.2 prices, prices for more personal-use half-ton pickups grew by 0.5 percent with demand center on later model year units (2010 –12). Despite April’s small step back, annual large pickup price growth leads all other segments at 7.2 percent.
As for mid-size vans, April’s non-existent price movement was a decided departure from the previous three months when prices increased by an average of $522 per month. “This was a result due in part to a steadily increasing supply of 2011 and 2012 model year off rental units entering the used market,” read the NADA Used Car Guide Industry Update report for May.
Concentrated demand for certification-worthy, three-year-old off-lease units pushed luxury car prices up by 1.1 percent, the second highest increase posted next to that of compact cars.
Through April, market prices relative to the first of the year were up by an average of 8.1 percent and were 2.2 percent higher than the average recorded in April 2011.
“For May, the NADA is predicting that prices relative to April will be down by a modest 0.6 percent due primarily to a slight seasonal contraction in demand,” stated the report. “Correspondingly, value adjustments for May’s edition of the Official Used Car Guide were on aggregate mild and ranged from a 1.4% hit to luxury utilities to a 2% increase for compact cars.
Despite the slight retreat of gasoline prices, the NADA is forecasting that they will remain at elevated levels through the summer months, which will continue to benefit used compact and mid-size car prices, while, in turn, applying downward pressure to truck prices.
“Trucks will continue to be supported by the long-running decline in used supply, which will have more of a lifting effect in the second half of the year than in the first,” the report stated. “The NADA is currently projecting that used prices in June will fall by 0.4 percent from May’s expected level, and although we’ve adjusted our annual forecast down slightly, we still expect prices to grow by 1 percent through the end of the year [for vehicles up to five years in age].”
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