Wholesale values are continuing their typical autumn descent, according to the COVID-19 Market Insights released by Black Book on Tuesday.
However, analysts and auction observers noticed that consignors aren’t budging much when it comes to the floors for the limited volume of vehicles going through the wholesale market nowadays.
With that scenario as the backdrop, Black Book got into the details of the latest price movements for both cars and trucks.
Based on volume-weighted data, Black Book determined overall car segment values decreased 0.37% over the past week, nearly mimicking the exact drop seen during the previous week that was 0.38%.
Dealers who needed midsize cars might have found bargains when the hammer came down as Black Book said values for those particular units dropped 0.89% this past week.
Conversely, analysts found that values in the luxury car segment rose 0.37%, “but it is expected that will be short-lived.”
Analysts continued in the report by saying, “This segment saw high no sale rates on the lanes this past week with sellers unwilling to adjust floors yet. The few units that did sell garnered a strong price, but overall demand appeared to be softening.”
Meanwhile, on the truck side, Black Book indicated its volume-weighted information showed the overall segment (including pickups, SUVs and vans) values decreased by 0.18% last week, much more than the 0.02% dip the segment experienced a week earlier.
Analysts pointed out that small crossovers took the hardest valuation hits with sub-compact, compact and sub-compact luxury segments all sustaining declines of more than 0.50%.
Values for those highly sought-after full-size trucks rose for the 18th week in a row, according to Black Book’s tracking. However, the increase of was just 0.12%, only a fraction of the prior week jump of 0.54%.
Black Book wrapped up their latest auction update with a trio of observations that other dealers and used-car managers might be experiencing, too.
“The auctions were a mixed bag of results last week with some locations reporting strength in sales rates and others seeing increases in no sales, particularly on luxury units and sedans,” analysts said. “Full-size trucks and SUVs continue to bring a lot of attention as sellers with these units are having better success.
“Remarketers are letting us know they are short on inventory and don’t foresee that changing anytime soon,” analysts continued. “As a result, their plans to adjust floors are minimal. However, they are preparing for a softening in values for the remainder of the year.”
And which retailers are adding inventory nowadays? Black Book mentioned it’s not quite the same situation as what unfolded during the heat of summer.
“The big buyers (CarMax, Carvana, etc.) continue to be active at the auctions, but their zealous bidding and buying throughout the summer months has begun to slowdown,” analysts said. “Their need to be the final bidder — no matter the cost — appears to have lessened over the last two weeks.”