Black Book Market Insights

Wholesale Prices, Week Ending July 1

Declines are continuing across all segments, the overall market rate of weekly depreciation slowly increasing each week. Last week marked the ninth consecutive week of declines. In the auction lanes, no-sales are still abundant, with sellers holding firm on floors and buyers being cautious.

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

Car segments                     -0.42%          -0.44%           -0.28%

Truck & SUV segments    -0.45%          -0.41%           -0.15%

Market                               -0.44%         -0.42%          -0.20%

Car Segments

• On a volume-weighted basis, the overall car segment decreased 0.42%. For reference, the previous week, cars decreased by 0.44%.

• The other age units we track had similar trends, the 0- to 2-year-old down 0.32% and the 8- to 16-year-old cars declining 0.37%.

• All nine car segments decreased last week.

• The subcompact car segment reported the largest decline at 0.68%. That marks the ninth consecutive week of declines for the segment, with an average weekly change of -0.52%.

• Sporty car has been up and down in recent weeks with small changes, but last week it declined 0.18%. Pre-COVID, the segment began to report declines around the beginning of June.

Truck / SUV Segments

• The volume-weighted overall truck segment decreased 0.41%, staying consistent with the prior week’s decrease of 0.37%.

• The 0- to 2-year-old truck segments reported a smaller decline last week (-0.40%), as did the 8- to 16-year-olds, which declined 0.33%.

• All 13 truck segments reported a decrease last week.

• Compact luxury crossovers and compact vans reported the largest declines, down 0.77% and 0.76%, respectively. Both had an increase in depreciation from the prior week, the crossovers down 0.42%, and vans down 0.35%.

• Full-size vans had the smallest decline, falling 0.17%, its smallest weekly change since the first week of May.

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 past years 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 the year, resulting in declining retail asking prices for the last several weeks. When CY2021 kicked off, demand rebounded while retail prices lagged slightly behind wholesale prices. March of 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 once again to start the fourth quarter, when they 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 remained relatively stagnant through most of CY2022. In the fourth quarter, 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 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 1.01 points, up from the slight dips we saw at the beginning of the year and above the 1.00 mark for the first time this year.

The used retail days-to-turn estimate is currently around 52.

Wholesale

Wrapping up June, we saw auction conversion rates and prices continue to drop. July will start with a long weekend for a lot of folks, and it will be interesting to see what the month holds in store for the wholesale market,

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 remained at 46% last week.