Black Book Market Insights

Wholesale Prices, Week Ending June 10th

Declines continued throughout the entire market last week, with the exception of one segment, Sporty Car, which was up only +0.04%. The rate of decline is starting to outpace what is typical for this time of year when compared to a pre-COVID market.

                                             This Week        Last Week        2017-2019 Average (Same Week)

Car segments                         -0.45%              -0.26%               -0.39%

Truck & SUV segments        -0.34%              -0.34%               -0.21%

Market                                   -0.37%              -0.31%               -0.28%

Car Segments

• On a volume-weighted basis, the overall Car segment decreased -0.45%. For reference, the previous week, cars decreased by -0.26%.

• Only one of the nine Car segments increased last week.

• Sporty Car increases are slowing, up a minimal +0.04% last week, compared with +0.38% the prior week.

• Sub-Compact Car reported the largest decline last week, dropping -0.89%. In comparison to the prior week, Sub-Compact Car also had the largest Car segment decline of -0.63%.

Truck / SUV Segments

• The volume-weighted, overall Truck segment decreased -0.34%, matching the prior week’s decrease of -0.34%.

• All thirteen Truck segments reported a decrease last week.

• Minivans had increased for fifteen consecutive weeks, but the last two weeks have the segment finally showing signs of softening. Last week, the segment declined a very minimal – 0.002%, compared with the prior week’s also small decline of – 0.02%.

• The Mid-Size Luxury Crossover segment reported the largest Truck segment decline last week, down -0.73%.

Weekly Wholesale Index

The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year. The index is computed keeping the average age of the mix constant to identify market movements.

Calendar year 2020 and 2021 ended with used wholesale prices at elevated levels. With economic patterns (including the automotive market) driven by the pandemic, normal seasonal patterns (e.g., 2019 calendar year) in the wholesale market were not observed for most of the last three years. We saw a similar picture in 2009, at the end of the Great Recession. Calendar year 2021 did not have typical seasonality patterns as the market had rapid increases in wholesale values for most of the year. The Wholesale Weekly Price Index reached the highest point of the year at the end of December 2021, reporting over 1.51 points. In 2022, the price index was on a mild rollercoaster until July, after which point, prices were on a continuous decline until the end of the year.

Used Retail Prices

Used Retail Prices are more accessible than in years past, due to the proliferation of ‘no-haggle pricing’ for used-vehicle retailing. Transparent pricing upfront makes the car buying process more enjoyable for customers and allows Black Book to accurately measure retail market trends. At the on-set of the pandemic, in CY2020, used retail prices increased slightly, following typical seasonal patterns, and then began dropping in April, finally hitting a low point in the late spring months. By late summer of CY2020, Used Retail Prices increased as supply of new vehicle inventory started to become scarce, but retail demand slowed down at the end of CY2020, resulting in declining retail asking prices for the last several weeks of the year. When CY2021 kicked off, demand rebounded while retail prices lagged slightly behind wholesale prices; March of 2021 started the dramatic increases in Used Retail Prices, fueled by stimulus payments, tax season, and shortages of new inventory. During the third quarter, retail prices continued to rise at a slower rate but soon picked up the pace once again to start the fourth quarter. In Q4, prices on retail listings steadily increased week after week. As CY2021 came to an end, the retail listing price index closed 36% above where the year began. The index then remained relatively stagnant through most of CY2022. In Q4 of 2022, the Retail Listings Price Index declines started, but were not as steep as the wholesale price index.

This analysis is based on approximately two million vehicles listed for sale on U.S. dealer lots. The graph below looks at 2-6-year-old vehicles. The Index is computed keeping the average age of the mix constant to identify market movements.

Inventory 

Used Retail

The Used Retail Active Listing Volume Index reverted back to one at the start of 2023. Currently, the index sits at 1.01 points, up from the slight dips we saw at the beginning of the year.

The Used Retail Days-to-Turn estimate is currently around 50 days.

Wholesale

Last week, we saw mixed signals again in the wholesale market. The conversion rate dropped a point to 48%, with some lanes still selling in the 85-90% range while others struggled to sell 30-40%. Prices were all over the place, but one thing remains consistent- the low mileage, high condition grade vehicles are still selling for a premium. As always, the Black Book team of Analyst will keep their eyes on the market watching for developing trends and insights. The Estimated Average Weekly Sales Rate decreased to 48% last week.