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SOURCE NADA Used Car Guide
Wholesale auction prices returned to normal after harsh winter.
MCLEAN, Va., May 9, 2014 /PRNewswire/ -- NADA's seasonally adjusted used vehicle price index was little changed in April at 125.8, tied with March as the highest figure reached, according to the National Automobile Dealers Association (NADA) Used Car Guide in the May edition of Guidelines, a monthly report on new and used vehicle sales trends and price movement.
Following a pronounced 3.7% rise in March, the average price of units up to eight years in age fell by 1.1% in April, essentially equal to the 1% rate of decline recorded in April of 2012 and 2013.
"No longer influenced by harsh winter weather, wholesale activity returned to normal in April," said Jonathan Banks, executive automotive analyst of NADA Used Car Guide. "The onset of seasonal softness typically observed at the start of the second quarter every year slowly materialized as the month progressed."
Price movement at a segment level was directionally in line with NADA's expectations as prices dropped the most for the segments that experienced the biggest increases in March.
After rising by an average of nearly 4% in March, prices for mid-size cars, utilities and vans fell by an average of 1.3% in April. Compact utility prices followed suit, dropping by 1.2%, while compact car prices slipped by a less severe 0.8%.
While prices for all compact cars, utilities and mid-size cars were lower in April, depreciation was on average one percentage point less than what was recorded for the month last year. Mid-size utility depreciation matched last year's pace, while the mid-size van segment fell nearly one percentage point.
In a reversal from a months-long trend, large pickup depreciation was among the market leaders, as prices for the segment fell by 1.3% last month. April's decline was the third largest recorded for the segment in the past two years, trailing the 1.6% drop in September 2013 and 2.4% drop observed in October 2013.
Prices for luxury utility and luxury car prices fell by 0.6% and 1%, respectively, while large SUV prices dipped by just 0.4%, the least of any segment.
NADA forecasts that typical seasonal forces and an increase in supply will push prices down by approximately 3% in May, which is roughly one percentage point more than the average decline recorded in May of 2011–2013.
Depreciation across segments is expected to be tightly dispersed, with prices for the majority of them forecast to drop near the 3% market average. Exceptions to this include large pickups and luxury mid-size cars, where prices for the former are expected to drop closer to 2%, while depreciation for the latter is expected to be near 3.5%.
"Given that energy prices have remained stable, consumer sentiment is trending up and job growth rebounded in April, we forecast that price movement will follow a familiar seasonal pattern through the summer," said Banks.
NADA forecasts that depreciation will progressively moderate to rates of approximately 2%–2.5% in June and 1%–1.5% in July before picking up again in August.
Click here for the May edition of Guidelines.
About NADA Used Car Guide
Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA's editorial team collects and analyzes over one million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis, and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b to learn more.
NADA represents nearly 16,000 new-car and -truck dealerships with more than 32,000 domestic and international franchises. For more information, visit www.nada.org.
Manager, Public Relations
NADA Used Car Guide
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