NADA UCG: Wholesale Prices Remain Solid, Effects of Rising Gas Prices Evident

In the first installment of exclusive AuctionNet Wholesale Price and Forecast Data provided by NADA Used Car Guide to Auto Remarketing, wholesale prices remain consistent, but the effect of rising gas prices is “undeniably evident,” the organization stressed.

And some segments, though not normally thought of as gas sippers, are also benefiting from the spring season.

Mid-size vans continue to “benefit not only from lift normally associated with the spring selling season, but also from an ongoing reduction in supply and the versatility (capacity and relative fuel economy) the segment has to offer,” NADA Used Car Guide explained.

The two-week average rate of growth in wholesale prices for this segment led all other segments by 3.8 percent, according to the organization’s AuctionNet data.

And NADA UCG expects wholesale prices for this segment to rise by 3 percent, or $475, over the course of this week.

Following closely behind, the rate of growth for compact car and mid-size car segments has made significant jumps, as well, perhaps reflecting the recent climb in gas prices.

The compact car segment wholesale prices jumped 3.7 percent, and the mid-size car segment saw a rise of 3.2 percent.

“Price growth for the current week is  expected to slow somewhat to 2.5 percent for the compact car segment and 1.6 percent for the mid-size car segment,” NADA Used Car Guide further explained.

On the other hand, indicative of the season change and fuel-price trend, large pickup, large SUV and luxury utility prices have fallen behind other segments.

And NADA UCG analysts expect prices for large pickups and luxury utilities to stay relatively flat.

But large SUVs are expected to see more of a change, falling by 2.3 percent, or an average of $600, the organization concluded.

4- and 2-week AuctionNet wholesale average prices are created by collecting all AuctionNet records for vehicles up to five years of age for a specified period of time.  Prices are then adjusted for changes in mileage and mix.

Current week prices are forecasted based on NADA's proprietary used vehicle value model which includes assumptions for new vehicle prices, used vehicle supply, gasoline prices and other economic factors.

Average AuctionNet® Wholesale Price

Editors Note: Auto Remarketing will be receiving these AuctionNet data updates weekly. Keep an eye out for the next installment in your Auto Remarketing Today e-newsletter.

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Edmunds.com: Loosening Credit and Rising Gas Prices Bring Shoppers Back to Lots

As credit loosens, confidence in the economy improves and gas prices climb, consumers are heading back to the lots, according to the sales forecast from Edmunds.com. 

As these factors drive rising auto sales, analysts contend that after “delaying purchases” over the last couple of years, shoppers will “march” back to the lots, contributing to what Edmunds.com has predicted will be 1,451,956 new-car sales this month.

This translates into a SAAR of 14.9 million units and would mark a 26.4-percent increase from February and a 16.5-percent increase year-over-year.

And an estimated 3.64 million used cars will be sold in March, for a SAAR of 38.3 million units (compared to 3.55 million – or a SAAR of 39.2 million – used-car sales in February), according to the company's data.

“After delaying purchases over the last couple of years, consumers are eager to jump into the new car market,” said Jessica Caldwell, senior analyst at Edmunds.com.

“Vehicle trade-in rates have achieved sustained highs in recent months, which suggests that consumers have decided that they’ve held on to their cars for too long. And with the average credit score for new car buyers at its lowest level since the first half of 2008, the market is clearly becoming a friendlier place for all buyers,” she continued.

Breaking the data down further, Edmunds.com estimates that retail SAAR will come in at 11.8 million vehicles in March, with fleet transactions accounting for 20.6 percent of total sales.

And as fuel prices climb, shoppers are turning to gas sippers, analysts noted.

“The market share of subcompact and compact vehicles is expected to climb 11.0 percent and 5.8 percent, respectively, from February to March,” Edmunds.com predicted.

“Midsize market share is also projected to climb 2.3 percent over the same period,” analysts added.

And as for market share by automaker, Chrysler continues its upward momentum, with its year-over-year sales and market share set to rise more than any other major auto manufacturer, the company explained.

Chrysler is expected to sell 164,000 vehicles in March, marking a 34.9 percent rise from last year.

Moreover, the OEM’s anticipated market share of 11.3 percent this month is a 1.5-percentage point  rise year-over-year.

And as for the Japanese manufacturers, Toyota is set to be the big player, which Edmunds.com contributed in part to “healthier inventory and favorable pricing.”

Edmunds.com expects Toyota sales to increase 22.1 percent year over year, with a 0.7 percentage point boost in market share, officials concluded.

Edmunds.com also offered the following charts to illustrate its findings:

 

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KBB: High Gas Prices Likely to Stay, but Automakers More Prepared Than 2008 Hike

Alec Gutierrez, Kelley Blue Book

It appears like the U.S. won’t see any relief at the gas pump any time soon and considering some of the volatile concerns overseas, fuel prices may climb even higher, according to Kelley Blue Book.

That said, automakers’ vehicle lineups have never been better-suited for gas-price hikes than they are now, KBB noted. What’s more, with Corporate Average Fuel Economy deadlines on the horizon, the market should see even more fuel-friendly rides in the future.

As for the time being, the Energy Information Administration expects national fuel costs to average $3.48 per gallon this year. That compares to an average of $3.53/gallon in 2011.

"Although initial estimates from the EIA do not suggest fuel prices to hit record highs this year, there are significant risks overseas that have the potential to send gas prices soaring,” explained KBB senior market analyst Alec Gutierrez, who went on to express a few concerns regarding America’s relationship with Iran and its impact of fuel costs down the road.

Oil costs might be steady now, however that could change dramatically in the event of an Iranian oil embargo, Iran following through on its threat to cut off the Strait of Hormuz oil pipeline or if the U.S. and Iran go to war, Gutierrez suggested.

Any of those events could push fuel costs significantly higher and possibly cause another U.S. recession, he added.

“In any scenario, consumers should be prepared to face gas prices of $3.50 per gallon or more for the foreseeable future,” he added. “Increased market share for compact cars and crossovers is likely in 2012 as consumers continue to emphasize fuel-efficiency when making their purchases.”

However, Gutierrez said it’s fortunate that the market has more fuel-friendly these days and stressed that fuel efficiency is stronger “than ever before.” He touted several vehicles unveiled at the North American International Auto Show in Detroit as examples of fuel-friendly rides that may attract consumer attention, including the Toyota Prius C (50 miles per gallon, $19,000 entry-level cost) and 2013 Ford Fusion (37 mpg).

In fact, Gutierrez listed five new vehicles achieving an average of 18.5 percent better fuel economy than their 2008 model-year editions, as the following list indicates.

—2013 Ford Fusion: 37 mpg, 27.6 percent higher than 2008 model-year.
—2012 Toyota Prius: 48 mpg, 6.7 percent higher.
—2012 Chevrolet Sonic: 40 mpg, 17.6 percent higher than 2008 Aveo.
—2012 Hyundai Elantra: 40 mpg, 21.2 percent higher.
—2012 Honda CR-V: 31 mpg, 19.2 percent higher.

“With so many vehicles available that offer excellent fuel economy, the market is better prepared today than at any time in the past to deal with spikes in energy prices,” Gutierrez noted. “Vehicles will only improve their fuel-efficiency ratings in the coming years as Corporate Average Fuel Economy standards continue to put pressure on manufacturers to increase the efficiency of their fleets.”

Of course, some argue the pressure from CAFE standards will hurt the industry in other areas.

In a recent interview with Auto Remarketing, incoming National Automobile Dealers Association chair Bill Underriner – a dealer from Billings, Mont. — voiced his concerns with CAFE, pointing out that hitting the fuel efficiency standard will come with quite a price.

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KBB Encourages Consumers Not to Wait to Buy Used Vehicles with Higher Prices on Horizon

KBB Encourages Consumers Not to Wait to Buy Used Vehicles with Higher Prices on Horizon
IRVINE, Calif.

Predicting a 4- to 6-percent spike in used-vehicle values into early next year, Kelley Blue Book came out Tuesday and strongly suggested that consumers make the move now if they're looking to purchase a used model.

 

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