Market Insights

Wholesale Prices, Week Ending August 19

The wholesale market continued to experience record declines for a third consecutive week, prices in some mainstream segments decreasing by more than 2%. On the other hand, we have yet to see any meaningful decrease in used-retail listed prices.

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

Car segments                              -1.73%             -1.35%             -0.19%

Truck & SUV segments              -1.43%           -1.49%              -0.21%

Market                                       -1.52%           -1.45%             -0.21%

Car Segments

• On a volume-weighted basis, the overall car segment decreased 1.73%. For reference, in the previous week, cars decreased by 1.35%. The decline exceeds the largest single-week depreciation experienced at the onset of the pandemic of 1.40%.

• The 0- to 2-year-old car segments were down 1.20%, and 8- to 16-year-old cars declined 1.90%.

• All nine car segments decreased, seven reporting declines exceeding 1%.

• Compact (-2.51%), midsize (-2.16%), and full size (-2.15%) cars declined more than 2%, the third straight week of single-week depreciation exceeding 2% in the segment.

• Premium sporty and prestige luxury continue to experience typical seasonal depreciation.

Truck / SUV Segments

The volume-weighted overall truck segment decreased 1.43%, which is consistent with depreciation the prior week, of 1.49%.

The 0- to 2-year-old models declined 1.20%, while the 8- to 16-year-olds declined 1.10%.

All 13 truck segments declined, and 11 had declines greater than 1%.

Minivan (-2.15%) was the only truck segment to drop by more than 2%. Despite being a large decline, it's still less than some of the declines last year and at the onset of the pandemic that were as large as 2.50%.

The small pickup (-0.74%) segment had smaller depreciation than the larger full-size pickup segment (-1.34%).

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 pas 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 onset of the pandemic, in CY2020, used-retail prices increased slightly, following typical seasonal patterns, 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 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 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, then remained relatively stagnant through most of CY2022. In the fourth quarter, 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 currently sits at 1.02 points.

The used retail days-to-turn estimate is currently hovering above 51.

Wholesale

For the third week in a row, the market had steep declines in both the car and truck segments. Auction conversion rates declined 1% after the prior two weeks showed improvement in the market. With the large declines in the market, we are now seeing buyers being more hesitant to pay any extra money for inventory. Buyers and sellers are both in a wait-and-see mode.

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 declined to 49%.