Retailers of consumer goods have been advertising discounts connected with Black Friday for several weeks now.
However, store managers looking to score a deal on used inventory like they might for a television or cookware might not be as successful.
Black Book conceded in its latest installment of Market Insights released on Tuesday that “values aren’t showing any signs of slowing down, with most expecting this strength to last through the traditional spring selling season.
“Sellers are holding firm to floors, with the expectation that if it doesn’t sell this week, it will the next week,” analysts added in the newest report, noting that overall vehicle values jumped another 0.64% during the week that closed on Saturday.
Taking a closer look at the car segment, Black Book determined prices on a volume-weighted basis moved even higher than the overall reading, with car prices rising 0.70%.
Analysts pointed out that all nine car segments reported value gains again last week, with near luxury cars leading the way with an increase of 1.03%.
“This is a segment that has a large lease penetration rate. And with this strong market, very few of those are making it to the auction lanes,” Black Book said.
Analysts added that even despite cooling temperatures, values for sporty cars (up 0.06%) and premium sporty cars (up 0.14%) generated gains again last week.
Meanwhile over in the truck department, Black Book said its volume-weighted information showed that overall truck values rose another 0.61% last week, as all 13 truck segments posted price gains.
Analysts indicated compact vans generated the largest value increase among trucks, rising 2.04% last week, “but the segment is very small in volume.”
“The sub-compact and compact crossover segments of both the mainstream and luxury variants are seeing large week-over-week increases,” analysts added while noting compact luxury (up 1.20%) and subcompact (up 1.13%) crossovers both had price increases exceeding 1% last week.
While it might not help dealers reduce their stress over securing inventory — or finding gifts for spouses, children and friends for that matter — Black Book tried to set the scene for what might be happening in the lanes as we move past Thanksgiving turkey and into the time of Christmas, Hannukah and Kwanzaa.
“As we go into the holiday season, the volume of newer used vehicles is typically expected to increase as lease returns and rental vehicles come back into the market, but this year will most likely look a little different,” analysts said. “New model year vehicles have been trickling into the lanes, but a significant portion of vehicles have been purchased upstream or come to the lanes damaged.
“With franchise dealers having more opportunities to buy inventory at grounding, the fierce competition in lane can be mostly attributed to large independent dealerships and rental companies,” analysts continued. “Inventory scarcity has caused bidding wars across the country. Wholesale values and floors continue to increase and give no indication of slowing down.
“The weekly estimated average sales rate has remained stable at the 70% mark for the second week in a row,” Black Book added. “This time last year, the estimated average weekly sales rate was around 51%, so while floor prices continue to rise, buyers continue to purchase vehicles at auction at a higher rate.”
Source : AutoFinanceNews
