Larry Dixon

Used Market Update: June 12, 2020

Wholesale Auction Sales Exceed Pre-Virus Expectations

Wholesale auction sales of vehicles up to 8 years old surpassed pre-virus forecast the week ending June 7. Sales reached an estimated 98,000 units, up from the 95,000-unit pre-virus forecast for the week. The week marked the first time since early March with wholesale sales at or above normal levels.

Weekly Wholesale Auction Sales (000s)

Volkswagen Diesel Price Update — Week 11

Wholesale auction prices of 2.0-liter diesel engine Volkswagen Jettas and Passats — the most voluminous of those involved in the automaker’s well-publicized emissions violation issue — have fallen by approximately 13% to 16% since the U.S. Environmental Protection Agency (EPA) issued its initial notice of violation (NOV) mid-September.

Volkswagen Diesel Price Update — Week 6

Gas-powered Jetta and Passat prices for model years 2011-2013 have generally fallen by amounts similar to those of their respective segments. Six weeks post-notice of violation, 2011-2013 gas-powered Jetta prices declined by a range of 5% – 10% compared to the four week period prior to the EPA’s NOV. During the same period, compact car prices overall fell by an average of 4%.

Electric Vehicle News: EV Roadmap 8 Conference

A couple of weeks ago, I had the opportunity to participate on a panel at the 8th annual Electric Vehicle Roadmap conference in Portland, Oregon. Founded by Portland General Electric and Portland State University, the conference provides a forum for manufacturers, suppliers, government officials, and other key stakeholders to discuss (and debate) the current and future state of EV affairs. Conference attendees were extremely well-informed and passionate about the opportunities EV technology presents. While their opinions on root-cause were varied, participants were quick to acknowledge the challenges faced by EVs as well.

General Motor’s Gamble on Mid-Size Pickups is Paying Off

General Motor’s reentry into the mid-size pickup segment, which materialized in the form of the 2015 Chevrolet Colorado and GMC Canyon, was greeted with a modicum of skepticism. The eyebrow-raising wasn’t without merit, as the once thriving small pickup market that had routinely toyed with 1 million sales per year had been gutted by the shift toward crossover utilities (mid-size pickup sales were roughly 250,000 in 2014).

While Summer Heats Up, Vehicle Depreciation Cools Off

Used vehicle depreciation improved considerably over the first half of June compared to the substantial rate recorded in May. Used vehicle prices through the first two weeks of the month have fallen by 2.3% compared to all of May, which is nearly a percentage-point better than last month’s 3.2% decline. While May’s fall was the fourth worst showing for the month since 1995, June’s month-to-date drop is fairly typical for the period.

May Mid-Month Used Price Update

Depreciation over the first half of May has been more or less consistent with the trends we’ve observed over the first four months of the year.

To date, prices this month of vehicles up to eight years in age have dropped by 2.7% relative to April. That figure equals NADA’s forecast for the entire month. While it’s certainly possible for prices to move even lower in the coming weeks, the fact depreciation slowed from well above 3% in the first week of the month to its current rate suggests May will close with prices near current levels.

New Vehicle Spiffs Rise Noticeably In April

According to Autodata, automakers elected to hold the line on incentives over the first three months of the year following a two year period of steady increases. But the year’s short-lived streak was broken last month, as manufacturers increased incentive spending by 3.2% compared to last April to an average of $2,671 per unit. The month’s moderate rise placed spending year-to-date 1% higher than it was over the period last year.

Credit Update: Times Are Good Now, But What About Tomorrow?

Credit availability and new and used vehicle sales are basically joined at the hip. After all, automaker captive finance companies were created with the mission to provide credit to consumers so more new vehicles could be bought and produced. Among many things, the Great Recession and the years since reaffirmed the lesson that as credit availability goes, so go new and used sales. Prices are also affected by access to lender cash. The incredible interest rate wave the market has been riding for the past few years combined with ever-increasing loan terms have allowed consumers to buy more richly contented vehicles with only nominal changes in monthly payments.