Manheim: Watch for Financial Market Turbulence, Black Book: Sub-compacts Strong in Tax Season February 14, 2016

January Price Patterns More Seasonal than Starting Downturn

Tom Webb
Chief Economist
Cox Automotive

Vehicle supply is increasing as much as was expected, but wholesale used vehicle values were more affected by seasonal patterns than oversupply from off-lease and off-rental returns. Dealers continued to see a softening in used vehicle gross margins that became clear in Q4 of last year. Dealers have been moderating their bidding to stabilize their risk-reward ratio at resale.

Review the latest Manheim Used Vehicle Value Index

Wholesale Prices Fell to 125.2 on the Index – Virtually Unchanged from Last Year:
That was only the second price decline in the past eight months.

Global Financial Market Turbulence Will Be Impacting Auto Loan Lenders:
If loan delinquencies and loss severities rise in Q1, it will be viewed with concern.

Compact Cars Remain Weakest of Major Categories with Y-O-Y Decline near 9%:
Pickups, both midsize and full-size, remain the strongest segment.
Anil Goyal

Large SUVs and Compact Cars Show Stark Contrast

Anil Goyal
Senior VP of Automotive Valuation and Analytics
Black Book

Two vehicle segments that have shown stark contrast in vehicle value retention trends have been large SUVs versus small cars. Full Size Crossover/SUVs are retaining value better than levels seen in last 10 years, while Compact Cars are on the decline after reaching a peak in 2013. Remarketers have seen overall stable conditions at auctions with bad weather having some effect.

See Black Book Market Insights for this week

Sub-Compact Cars Started to Show Strength with Tax Season Approaching:
In addition, most crossover/SUV segments remain relatively strong in the market.

All Car Segments Except Sub-Compact Cars Declined in Value:
Car values declined by 0.47% last week, which is close to 0.44% average in recent weeks.

On Truck Side, Sub-Compact Crossover Segment Declined the most at 2.04%:
Full-Size Crossover/SUV and Compact Van segments experienced an increase.
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