February's 20-Year Streak of Increased Used Vehicle Prices Ends

Thursday, 08 June 2017 11:39

February's 20-Year Streak of Increased Used Vehicle Prices Ends

MCLEAN, Va., March 14, 2016 /PRNewswire/ -- Wholesale used vehicle prices generally rise in February as dealers prepare for increased spring consumer demand. In fact, up to this year, prices had moved higher in February for twenty years straight. The streak came to an end last month, however, as wholesale prices of vehicles up to eight years in age fell by nearly 1 percent from January.

In their March Guidelines report covering the U.S. used vehicle market, analysts at NADA Used Car Guide note above average increases in late auction volume likely played a role in February's depressed outcome. Auction volume of 2014 and 2015 models increased by an average of roughly 20 percent from January to February.

Jonathan Banks, executive analyst for NADA Used Car Guide said, "While it's normal for volume to grow over the period, the rise was four times larger than what occurred on a like-model age basis the past two years."

Overall, February's weak performance pulled NADA Used Car Guide's seasonally adjusted used vehicle price index down by 3 percent from January, to 118.6. The decline is the largest recorded for any month since November 2009. In addition, the index stood at 123.8 last February, or more than 4 percent above this year's level.

Analysts expect depreciation to return in April as used prices are forecast to fall by 1 – 1.5 percent, similar to the 1.2 percent drop that occurred in 2015.