Lane watch: Why there’s an upbeat mood at auction
We turned out clocks ahead on Sunday and spring officially arrives on the calendar next week.
As far as the auction climate, Black Book said spring is in full swing, in part because 32% of vehicle segments generated a rise in value last week.
All told, analysts reported wholesale prices edged just 0.05% lower and the estimated average weekly sales rate improved to 57%.
“The expected ‘return to normalcy’ for the automotive market remains on course, as overall market depreciation continues to subside,” Black Book said in its newest installment of Market Insights released Tuesday.
“Recapping the first full week of March, the wholesale market exhibits further improvement, with three truck and three car segments reporting positive movement, signaling the commencement of the spring market,” analysts continued in the report. “The mood in the auction lanes is upbeat, a sentiment echoed by a 2% increase in auction conversion rates compared to the previous week, alongside a slight reduction in auction inventory.
“This combination of factors points to a growing optimism within the market,” Black Book added.
Looking closer at the newest data, Black Book found that overall car values decreased 0.14% on a volume-weighted basis.
The values of cars softened at a similar rate, no matter the age. Black Book indicated prices for cars up to 2 years old dipped by 0.20%, while values for cars ages 8 to 16 years old declined by 0.13%.
While not quite a rate they’ve seen recently, analysts noticed prices for compact cars increased for the ninth consecutive week, climbing another 0.22% last week.
During the week that transitioned from February to March, Black Book said prices for compact cars climbed 0.41%.
Even prices for midsize cars and full-size cars ticked up; albeit just 0.01%, according to Black Book tracking.
Perhaps as a nod that potential buyers are wanting value over vanity, Black Book pointed out that the value drop for premium sporty cars more than doubled, going from 0.32% to 0.77%.
In the truck department, Black Book said overall, volume-weighted values ticked down just 0.02%.
That was the same rate that 8- to 16-year-old trucks depreciated, while Black Book noticed that models up to 2 years old softened by 0.14% on average.
Again, maybe the value of versatility is showing in the lanes: Black Book watched the small pickup and minivan segments both rise in price again last week, climbing by 0.37% and 0.38%, respectively.
Additionally, analysts indicated the midsize and full-size crossover segments generated value growth, with upticks of 0.04% and 0.39%, respectively.
Furthermore, Black Book pointed out the rate of price decline for compact crossovers is decelerating, as those units decreased just 0.04% last week.
Also of note, Black Book said the full-size truck segment demonstrated more stability with only a minimal depreciation of 0.02%.
Might the upbeat feeling continue in the lanes as dealers acquire inventory from auction while perhaps also filling out college basketball tournament brackets and anticipating the start of baseball season?
“As always, our team of analysts are focused on keeping their eyes on the market, watching for developing trends and gathering insights,” Black Book said.