Lane watch: Experienced dealers might have heard this song before
Classic country music fans might know the 1990 song by Vern Gosdin titled, “This Ain’t My First Rodeo.”
Experienced used-car managers might be singing a similar tune while navigating by spring market signs, according to the latest wholesale market recap Black Book released on Tuesday.
Black Book reported overall wholesale values dipped only 0.23%, while the estimated average weekly sales rate declined to 53% last week.
“As we reach the midpoint of February, the wholesale market continues to display stability,” analysts said in their newest installment of Market Insights. “This pattern mirrors what we’ve seen over the past three weeks, with no significant shifts in prices, either upward or downward.
“For the first time in three weeks, auction conversion rates have dipped, accompanied by a slight decrease in auction inventory. Additionally, sellers are sticking to their reserve prices, expecting that values may rise in the weeks ahead,” Black Book continued in the report.
Perhaps that will create the used-car rodeo that dealerships have seen for years, as consumers receive their federal tax refunds and the weather improves, creating the itch to upgrade their vehicle.
That steady scene Black Book mentioned certainly appeared among cars, which decreased in price by only 0.17% on a volume-weighted basis last week.
A week earlier, car values decreased by 0.18%, according to Black Book tracking.
Analysts said values for cars 2 years old and newer ticked 0.17% lower, while values for units 8 to 16 years old declined 0.16%.
Black Book acknowledged eight of the nine car segments experienced depreciation a week ago, but compact cars continued their value march higher.
“The compact car segment maintained its upward trajectory last week with a 0.08% rise, representing the sixth week in a row of appreciation for vehicles aged between 2 to 8 years old,” analysts said. “On average, over the past six weeks, this segment has seen a weekly increase of 0.13%.”
“Standing in stark difference to the compact segment, the smaller sub-compact category is depreciating faster than the broader car segment,” Black Book continued. “Nonetheless, last week saw a deceleration in its decline to 0.38%, versus its six-week average depreciation rate of 1.01%.”
Turning to trucks, Black Book reported overall values decreased 0.26% based on its volume-weighted data. A week earlier, truck prices dropped 0.29%.
Newer trucks held their values a bit more, as analysts said units up to 2 years old dipped 0.15%. Black Book pointed out trucks 8 to 16 years old decreased by 0.28% on average a week ago.
Pacing the value declines among 12 of the 13 truck segments were full-size luxury crossover/SUVs, which depreciated by 0.74%. It marked quite a jump for that segment, which ticked just 0.05% lower on average during the previous four weeks of Black Book observations.
“For the third consecutive week, the mainstream full-size crossover/SUV category saw an increase; this time by 0.07%,” analysts said. “However, this uptick was more modest compared to the previous week’s more substantial gain of 0.38%.
“Small pickups in the 0-to-2-year-old used vehicle category posted gains for the second week in a row, increasing by 0.17%,” Black Book added.
Just like the chorus of a country song might be repeated multiple times, Black Book went on to say, “As always, our team of analysts are focused on keeping their eyes on the market, watching for developing trends and gathering insights.”
Sounds like music to the industry’s ears.