Market Insights

Wholesale Prices, Week Ending July 8

With the holiday last week, many of the auctions had fewer vehicles offered for sale, and there were fewer bidders trying to obtain inventory. As for valuations, the market continued to decline, but the rate of decline has been consistent in recent weeks, staying below half a percent per week.

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

Car segments                    -0.52%         -0.42%        -0.47%

Truck & SUV segments    -0.45%         -0.45%        -0.28%

Market                              -0.47%          -0.44%        -0.35%

Car Segments

• On a volume-weighted basis, the overall car segment decreased 0.52%. For reference, in the previous week, cars decreased by 0.42%.

• The 0- to 2-year-old car segments were also down but only by -0.35%; 8- to 16-year-old cars declined 0.48%.

• All nine car segments decreased.

• The subcompact segment had the largest decline, down 1.11%. That marks the10th consecutive week of declines for the segment, with an average weekly depreciation of 0.58%.

• The sporty car segment had a second consecutive week of declines, down 0.18% after the prior week’s drop of 0.16%.

• The near luxury car segment declined 0.74%, its largest single-week decline since the middle of January.

Truck / SUV Segments

• The volume-weighted overall truck segment decreased 0.45%, staying consistent with the prior week’s decrease of 0.45%.

• The 0- to 2-year-old truck segments reported a smaller decline last week (-0.35%), as did the 8- to 16-year-olds, which declined 0.35%.

• All 13 truck segments reported a decrease.

• The subcompact luxury crossovers had the largest truck segment decline, down 0.95%. It was the largest single-week drop for the segment since the last week of January.

• The minivan segment declined 0.87%, the largest depreciation since late December, when it declined 1.12%.

• Full-size vans continue to decline, but the rate of decline is lessening; it was only 0.10% last week.

Weekly Wholesale Index

The graphic below looks at trends in wholesale prices of 2- to 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.

Used Retail Prices

Used retail prices are more accessible than in years past due to the proliferation of no-haggle pricing. Transparent pricing upfront makes the car-buying process more enjoyable for customers and allows Black Book to accurately measure retail market trends.

At the onset 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, they increased as supply of new-vehicle inventory started to become scarce but retail demand slowed 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 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, when they steadily increased. As CY2021 came to an end, the retail listing price index closed 36% above where the year began. The index remained relatively stagnant through most of CY2022. In the fourth quarter of 2022, the Retail Listings Price Index started to decline but not as steeply as the wholesale price index.

This analysis is based on approximately two million vehicles listed for sale on U.S. dealer lots. The graphic below looks at 2- to 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, it sits at 1.03 points.

The used retail days-to-turn estimate is currently around 53.

Wholesale

July started off much like June ended, with wholesale prices continuing to move downward and continued low auction conversion rates. The first week of July, we saw a slight increase in auction volume and more repossessions hitting the lanes. The 2023 trucks and full-size SUVs that we see going through the auction are still bringing strong money. It appears that the summertime slowdown is in full effect as we move into July.As always, the Black Book team of analysts will keep their eyes on the market, watching for developing trends and insights.

The Estimated Average Weekly Sales Rate stayed at 46%.