Looking Ahead: What to Expect for Later- and Older-Model Prices

Recap on later- and older-model price shift In previous blog posts, we discussed some of the reasons impacting the price shifts across models years, with later-model prices softening more than those of their older counterparts. First, we looked at how the improving economy is impacting auto demand in general; with further analysis, we see that these economic forces – lower unemployment rates, a resurgent housing market, equity market gains and a competitive lending environment – are doing much more to increase new vehicle demand. Second, we explored the impact improved quality and dependabil ...

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Credit Conditions in Perspective: A favorable credit environment is helping to fuel auto sales

Much has been made of the role pent-up demand has played in the recovery of new and used auto sales – and to a lesser extent, the strength in used vehicle prices – over the past year or so. Slightly less trumpeted has been the progressively important part credit has played in helping to grease the skids for the industry’s performance.   It’s common knowledge that both new and used vehicle prices have risen substantially over the past five years, but historically low auto finance rates have kept monthly payments essentially flat. For example, per Experian Automotive data (which I’ ...

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Used Vehicle Depreciation Accelerates Into September

Declines expected to improve though month’s end. Used vehicle depreciation for units up to 8 years in age picked up through the first two weeks of September bringing the overall market average down by 2.1%, one point worse than August’s month-end figure of 1.1%. Across all segments, losses month-to-date increased compared to what was recorded in August with the exception of large SUVs and mid-size vans. Large SUVs prices have risen in September by 0.8%, a fairly substantial swing after last month’s 0.7% decline. As for mid-size vans, prices are still falling, but this month’s decline of ...

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Quality + Dependability = Higher Older-Model Prices

In a recent blog post, we discussed the impact of new market forces on later-model prices to help explain the shift in pricing of used cars across model years. But it doesn’t stop there; more than just economic growth, there are other key areas that impact the price of used cars, including advancements in quality and dependability. Historically speaking, vehicles over five years of age have taken a back seat to their younger, in-warranty counterparts in terms of demand. The result? Vehicles five years of age and older comprised  a very small percentage of the available stock on a franc ...

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Shifting Preferences: New Vehicle Demand Eclipsing Used

While it’s widely known that used vehicle prices have experienced an extraordinary period of growth over the past few years, lesser known is the extent that prices grew across the vehicle age spectrum. Over the first half of 2013, used vehicle prices were essentially equal to 2012’s historically high average when measuring on an aggregate basis. However, a deeper analysis reveals discernible shifts across model years, with later-model (those less than four years of age) prices softening more than those of their older counterparts. What does this mean? NADA primarily attributes these dive ...

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BMW Sales Surge in August: Up 46%, But Why?

U.S. sales for BMW jumped by 46% last month, making the brand’s August performance one of the best in both the mainstream and luxury sectors, second to only ultra-low volume Jaguar, which posted an even more impressive increase of 67% for the month.  BMW’s large increase in year-over-year sales was made possible by a strong display from the brand’s volume-leading 3 and 5 Series models, which saw extremely lofty gains of 67 and 158 percent, respectively. Now for the question on everyone’s minds… What caused such a large YoY increase for the brand, and even more importantly, what exactly ...

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Geely Prepares for Entry into U.S. Market; Other Automakers Hold Same Aspirations

With the U.S. auto industry riding a wave of momentum and many automakers achieving new levels of sales and profitability, it is understandable how foreign companies, looking in from the outside, would be salivating at the prospect of also making their mark in America, the land of opportunity. So perhaps it should have come as no surprise that Gui Shengyue, CEO of Geely Automobile, revealed to Bloomberg last month that the Chinese automaker is working with Volvo on product development with the intent to begin exporting cars to the States by 2016. Whi ...

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Fuel for Thought: August Proves another Great Month for Used Car Prices

Good news! Used vehicle prices remain at a historically high level with only a small drop of 1.1% in August, matching the average rate of loss in June and July. This comparatively light drop in August (prices fell 1.5% and 2.3% for the month in 2012 and 2011, respectively) lifted NADA’s seasonally adjusted used vehicle price index to 124.8, the highest level recorded so far in 2013. In Guidelines, our monthly automotive market report on new- and used-vehicle sales trends and used-vehicle price movement, we explored the biggest question for this trend: why?  In a sentence, an ongoing ...

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NADA Spring 2013 Car Shopper Preference Survey: Quality and Dependability Trump Fuel Economy

In NADA’s Spring 2013 Car Shopper Preference Survey, both car and truck buyers unanimously selected “Quality & Dependability” as the most important factor considered when determining which new vehicle to purchase. While both car and truck buyers placed “Quality & Dependability” well above any other trait, truck buyers placed slightly higher weight on it, with 80% of respondents considering it either important or very important versus 78% for car buyers. “Fuel Economy”, the factor cited as being most important in NADA’s fall 2012 survey, was selected as the second-most important facto ...

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2014 Mercedes-Benz E Class: Don’t call it a Facelift

 Last month I had the opportunity to log several hundred miles behind the wheel of Mercedes’ updated 2014 E Class during a full-line media review of the model (sans AMG variants) held outside of Portland, Oregon.  While the 2014 model is technically a mid-cycle refresh, it’s tough to discern this from the E Class’ heavily revised exterior.  In fact, if it weren’t for a few unchanged details and a slightly more informed eye, one could easily mistake the updated design for an all-new one. Starting with the exterior, all E Class body styles were given more modern – and decidedly m ...

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