MCLEAN, Va., Nov. 18, 2014 /PRNewswire-USNewswire/ -- According to the November NADA Used Car Guide Guidelines report, used vehicle wholesale prices have dropped, averaging a 3.7 percent decline since September. Marking the fourth month in a row used prices have dropped, NADA's used vehicle price index trended downward slightly in October by three-tenths of a point to 121, while a 6 percent increase in new vehicle sales has allowed the Seasonal Adjusted Annual Rate (SAAR) to hit 16.35 million.
"There are a variety of factors that affected October's decrease in used vehicle wholesale values," said Jonathan Banks, Executive Automotive Analyst at NADA Used Car Guide. "To name a few, we saw a 6 percent new vehicle sales bump, a 37 percent jump in 2014 model year auction sales volume, and a lack of demand for used vehicles due to the time of year."
For the 21st consecutive month, manufacturer incentive spending on new vehicles rose. Averaging a little over $2,700 per vehicle for the month, October's numbers are about 6 percent higher than over the same period in 2013. These numbers also helped contribute to the 3.7 percent average depreciation slide of the used vehicle market since September.
With two months to go in the year, Steven Szakaly, Chief economist at NADA stated, "We should see our original SAAR forecast target of 16.4 million by year-end."
While it is normal for late model vehicle volume to increase through the fall, this year's October volume is higher than last year's figure, enabling the used vehicle depreciation slide. The mid-size used van segment exploded in volume by 41 percent over last month, which devalued the segment by 5 percent. Mid-size vans have seen a 9 percent dip in value since September.
The used subcompact, compact and mid-size segments all saw decreases in value as well, but not as severe as that of the mid-size van segment. Within the subcompact and compact segments, the auction volume for 2013 and 2014 model year vehicles grew by a combined 15 percent. The resulting 4.3 percent price decrease for each segment was ushered along by falling gas prices. While late model volume for mid-size cars didn't increase during the same period, prices continued to drop, with a 3.6 percent decline.
For the sixth month in a row, large pickup prices remained the strongest out of all non-luxury segments. With only a 2.1 percent dip in price, the segment is only slightly higher than its 1.9 percent three year average.
Within the luxury segment, all used prices slid, but not as severely as their mainstream counterparts. Mid-size and compact vehicles saw the steepest decline within the segment at 2.4 percent and 2.3 in value, respectively. Compact and mid-size utility vehicles trailed behind with a respective 1.2 and 1.8 percent depreciation dip. Luxury large car prices have slowed to only 0.5 percent, which is much lower than the segments 3.4 percent three year average.
With a 5.4 percent year-to-date performance, new vehicle sales continue an upward trend, albeit some misses in sales performance by both import and domestic makes. Overall domestic sales fell short of the industry average at 4.8 percent. With deliveries up over 21 percent for the month, Fiat Chrysler continued its sales rampage. Meanwhile, competitors Ford and General Motors did not fare so well, lowering deliveries by 2.1 and 0.2 percent, respectively.
On the new import vehicles sales side, Asian and European brands led the industry during October, with deliveries reaching 7 percent growth. Year-to-date sales for imports improved 5.7 percent with Subaru leading Asian makers at 25 percent more vehicles sold than last year. Leading the European contingent, Audi saw sales 17 percent higher due to sales of new model A3 and Q3 vehicles.
Typical for fourth quarter, new vehicle inventories have increased substantially over the past month, swelling from a modest 11 days in September, to 75 days in October. On the domestic side, General Motors had the highest level of inventory at 94 days, while on the import side, Mitsubishi saw an even higher 107 days of supply. The leanest inventories among all manufacturers where seen by Subaru and Land Rover, with 21 and 27 days of inventory, respectively.
About the 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 1 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.
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NADA Used Car Guide
SOURCE NADA Used Car Guide