Wholesale Auction Market Nosedive Continues

Wholesale Prices, Week Ending June 24th

With days to turn continuing to inch higher, auction sales rates are trending lower as dealers are being cautious about their purchases. We have yet to see retail listing prices follow the same path as wholesale, but typically retail lags wholesale by six-to-eight weeks, so the expectation is the retail market will begin to see prices declining soon as well.

Wholesale Auction Market Nosedive Continues

On a volume-weighted basis, the overall Car segment decreased -0.44%. For reference, the previous week, cars decreased by -0.41%.
The other age units we track had similar trends last week, with the 0-to-2-year-old and 8-to-16-year-old Cars declining -0.41%.
All but one of the nine Car segments decreased last week.
Sporty Car was the only segment to increase last week, but it was a minimal +0.05%. The segment has been up and down in recent weeks, but overall, the segment is reporting stability with an average weekly change over the past month of +0.01%.

The volume-weighted, overall Truck segment decreased -0.41%, staying consistent with the prior week’s decrease of -0.37%.
The 0-to-2-year-old Truck segments reported a smaller decline last week (-0.29%), as did the 8-to-16-year-olds that declined -0.24%.
All thirteen Truck segments reported a decrease last week.
The Full-Size Luxury Crossover/SUV segment had the largest decline last week, down -0.68%. This is the largest single week decline for the segment since mid-January.

Weekly Wholesale Index

The graph below looks at trends in wholesale prices of 2-6-year-old vehicles, indexed to the first week of the year. The index is computed keeping the average age of the mix constant to identify market movements.

Calendar year 2020 and 2021 ended with used wholesale prices at elevated levels. With economic patterns (including the automotive market) driven by the pandemic, normal seasonal patterns (e.g., 2019 calendar year) in the wholesale market were not observed for most of the last three years. We saw a similar picture in 2009, at the end of the Great Recession. Calendar year 2021 did not have typical seasonality patterns as the market had rapid increases in wholesale values for most of the year. The Wholesale Weekly Price Index reached the highest point of the year at the end of December 2021, reporting over 1.51 points. In 2022, the price index was on a mild rollercoaster until July, after which point, prices were on a continuous decline until the end of the year.

Wholesale

Lower conversion rates and more no-sales in the past few weeks seems to be the theme for the month of June. All the Truck segments have declined in the last two weeks while most car segments also saw a decline last week, with the exception of Sporty Car. The larger wholesale sellers continue to do well, but the smaller sellers are struggling to move vehicles at the auction.