While a flood of used vehicle buyers – lower-income and middle-class buyers who are suffering from sticker shock at the prices of new vehicles and/or interest rates – has been predicted for several months now, this flood has yet to arrive, according to Black Book’s most recent Market Insights report, which examines volume-weighted information.
“Vehicle values registered an increased drop last week, particularly for car segments. Slow retail sales are reflecting in lower bids at the auctions,” said Black Book executive vice president of operations Anil Goyal.
Dealers who spoke with the report’s authors are reporting slow retail sales, and one noted that good front-line vehicles are still very difficult to find at the auctions. One auctioneer told Black Book that bidding has been relatively constant for the last few weeks.
The analysis found that overall car segment values decreased by 0.77 percent last week, which is slightly more than double the four-week average drop that Black Book calculated to be 0.38 percent. The values of mid-sized cars decreased the most, dropping by 1.2 percent, or $110. The next biggest drop was seen among compact cars, which declined 0.98 percent, or by approximately $80.
Other highlights from the report include:
- Volume-weighted, the overall truck segment (including pickups, SUVs and vans) values decreased by 0.27 percent last week. In comparison, the market values were down by 0.15 percent on average during the prior four-week period.
- In trucks, the values of full-sized luxury crossover/SUVs decreased the most, by 0.89 percent, followed by midsized luxury crossover/SUVs, with a decline of 0.52 percent.
- Manufacturer incentives on new vehicles have ticked up a little in the last couple of months. Segments with the highest five incentive percentages include luxury cars, full-sized pickups, near luxury cars, full-sized car and sub-compact crossovers.
- Older, higher mileage vehicles continue to be strong and attracted a lot of attention.