After January dip, February price uptick projected

As analysts confirmed a dip in January, J.D. Power Valuation Services is projecting an uptick in wholesale vehicle prices in February.

According to the latest installment of Guidelines, J.D. Power Valuation Services is expecting that wholesale prices of vehicles up to 8 years old will edge higher by 0.3 percent. If the movement happens as predicted, it would reverse what analysts recorded last February, which was a 0.9-percent decline.

Analysts also reiterated their full-year forecast remains for prices to remain steady by the time 2018 closes when compared to how 2017 unfolded.

With regard to the opening month of 2018, J.D. Power Valuation Services indicated that January prices for those units up to 8 years old fell by an average of 0.6 percent. As a result, the J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index declined slightly as the reading settled at 114.2, which turned out to be a 0.5-percent dip.

What analysts called, “typical for this time of year,” January losses at the segment level were led by premium categories. They noticed wholesale prices for luxury midsize cars dropped by 3.1 percent year-over-year. This particular segment has been impacted by a boost in volume of 3-year-old units, primarily 2015 models such as the Lexus GS and Audi A6.

Volume is up 95 percent and 86 percent year-over-year, respectively, for those two particular high-line units, triggering price sags of 3 percent and 4 percent.

Two other premium segments posted notable price declines in January as prices for luxury compact cars tailed off by 2 percent and prices for luxury compact utilities softened by 1.8 percent.

“While slightly elevated, these losses were more in line with what typically occurs for the period,” analysts said in Guidelines.

“Remaining premium losses were scattered and more severe than the industry average for the month,” they added, while noting prices for luxury midsize utilities dipped by 1.3 percent and prices for luxury large utilities edged 0.9 percent lower.

Turning over to what J.D. Power Valuation Services classifies as the mainstream part of the wholesale market, analysts noted that, “While large pickup prices continue to be strong, the segment is showing signs of losing momentum.”

Large pickup prices dropped by 1.7 percent in January, stretching a streak of declines to four months in a row. One particular model — the RAM 1500 — helped to extend the downward stretch as volume for these trucks jumped 68 percent in January, causing a 3.1-percent price decrease.

J.D. Power Valuation Services also noted that prices for large utilities dropped by 1.7 percent in January, as well. Not far off that pace, midsize truck prices softened by 1.3 percent.

Conversely, prices for compact cars and subcompact cars produces the only price increases in January as the Guidelinesreport indicated they ticked up by 0.2 percent and 1.0 percent, respectively.

Closing the mainstream market discussion, analysts shared the prices for midsize vans sagged by 0.9 percent while prices for midsize cars edged just 0.1 percent lower.


Source: Auto Remarketing

Cox Automotive