As leaves continue to fall and temperatures drop the used car industry wholesale prices follows suit. According to the NADA Used Car Guide’s October Update, in the month of September the price of used vehicles up to eight years in age fell 3.6%. This decline would mark the largest yet in 2016 for the used car industry. In the previous three years losses for this period averaged a similar 3.3%. Consequently, the month’s performance caused the NADA Used Car Guide’s seasonally adjusted price index to fall 1% to 117.5. The index’s lowest level since March 2011 can be seen in the figure below.¹
This downward price movement was led by subcompact and compact cars whose losses reached 4% each. Additionally large cars experienced a 3.7% loss. Mid-size and utility cars performed better then the average though still dropped 3.5% and 3.4% respectively. In terms of depreciation, used vehicles found a 14.9% price drop through September in relation to all of 2015.²
Used car auction volumes of models up to eight years old are still up 7% for the year, checking in with 3.48 million sales. 2013 models are leading the way with a 31.4% increase. This is due to to off-lease vehicles returning to the marketplace.³
What is the market for vehicles older than eight years? The average model year of a vehicle that we find the right buyer for is 1999/2000. See more of our services and how we innovate a unique industry on our website www.arscars.com.
The NADA Used Car Guide’s forecast for October numbers has prices falling 3.7% when compared to September. Going forward in 2016 monthly losses predict to be softer for the used car industry.