Auction prices for the week of October 18th – October 25th showed a mild continuation of the declines we have been seeing during the past few weeks.  Data on small cars continued to drop but at a rate just less than 1% for the week based on our tracking vehicles.  This represents the smallest week to week decline since late August.  Meanwhile truck prices showed little movement during week with prices on most vehicles remaining flat compared to last week’s values.

At the subsegment level the largest declines for the week were on luxury models, minivans and mid-size cars with declines averaging about 1.5% for these segments.  Large and mid size utility vehicles had the best performance with increases by ~2% and 1% respectively.

AuctionNet prices for most segments remain in positive territory.  Based on NADA’s index that tracks prices for a select basket of vehicles we found the following year over year increases.

All indications point to a continuation of a strong used market and although the recent declines may be disappointing they really reflect a more normal pattern for prices. When looking at the average auction prices recorded in AuctionNet data at the end of September we see a situation similar to NADA’s index values at the end of September.

In fact, even with the sharp declines in September and October many models still have prices above January’s levels in small and mid-size segments.  For example Hyundai Accents are selling for 10% more than last January and the Chevy Cobalt still maintains a 5% premium compared to prices at the beginning of the year.  Even the Prius, which has experienced dramatic declines since June is still up by 2 to 5% compared to January prices on 2-4 year old models.

Fundamentals still remain strong for used prices and we don’t expect too many surprises as we close out the year.  Our current forecast predicts moderate deflationary pressure on most segments (beyond normal depreciation) and strength in most of the truck segments. 

The forecast shown above represents additional inflation/deflation beyond normal depreciation.  So in the case of the Intermediate Compact segment we expect prices to decline by 3% plus 3 – 4.5% normal depreciation.  The forecast includes price impacts from seasonality, changes in gas price, and used supply.  If our forecast holds true we will still end up positive for the year by ~5% overall.  Not a bad finish to a highly volatile year.