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July's 2.3% Drop in Wholesale Prices Ties June Record, NADAUCG Reports

August 18, 2016
3 min to read


MCLEAN, Va. — Wholesale prices for vehicles up to eight years in age fell 2.3% in July, tying June for the biggest drop recorded so far in 2016, according to the NADA Used Car Guide. As a result, the firm lowered its seasonally adjusted used vehicle price index 1.1% to 118.9 .


The largest decline in wholesale price was recorded in the subcompact car segment, which saw prices drop 3.9% compared to June’s figures. Mid-size and compact cars followed a similar trend, with each segment recording an average price decline of 2.9% compared to the prior month. Prices for large cars fell 2.5%, higher than the industry average but better than the 2.8% decline the segment experienced last year.

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The large pickup and large utility segments continued to show strength, with prices for each segment falling 0.5% and 0.3%, respectively, compared to the prior month. While other large vehicle segments experienced slightly higher depreciation, the majority of the declines were still under the industry average.


Mid-size pickup prices fell 1.4%, compact utility prices dropped 1.7%, mid-size utility prices dipped by 1.8%, and vans dropped 2.7%.


According to the NADA, the luxury segment was a mixed bag in July. Small luxury vehicles experienced greater losses, while mid-size and large luxury vehicles fared slightly better. The biggest decline in the segment came from luxury compact utility prices, which fell 3.1% from the prior month. Compact car prices fell 2.7%, while luxury mid-size cars and luxury large car prices fell by 2.1% and 1.8%, respectively.


Year to date, used-vehicle prices were 12.5% lower than they were at the end of 2015. Last year, depreciation reached a lesser 9.6% over the same period, according to the NADA.


Compared to all of 2015, subcompact prices have fallen 19.9% year to date. Compact car prices have fallen 16.2%, and mid-size and large car prices have fallen 14% to 14.4%. Year to date, large pickup prices are down 6.8%, while large utility prices are down 5.7%. Mid-size pickups are down 6.3% compared to full-year 2015.

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The only segment to experience an improvement in depreciation relative to last year was the large utility segment, which saw prices fall 5.7% through July. For the same period last year, wholesale prices fell 7.1%, the NADA Used Car Guide noted.


Sales volume at auction was also on the decline during July. However, the firm noted, the decline is typical for the time of year. July’s decline marked the fourth monthyl decline in a row. On a year-to-date basis, however, volume is up 6%.


Looking forward, depreciation is expected to accelerate as the market enters what is typically the softest part of the year, according to the NADA. In next month’s report, the NADA Used Car Guide expects used-vehicle prices to fall even more than they did in July. August’s used-vehicle prices are expected to fall by 2.5% to 3% compared to July’s figures. Subcompact car prices are expected to drop by about 3% on a monthly basis, while compact, mid-size and large car prices are expected to fall 2.7%.


Compact utility and mid-size utility prices are expected to decline 2.3%, while mid-size van prices are expected to fall 2.7%. Large pickup and utility pricing are expected to suffer the softest decline at 1.8%, while luxury segment losses are expected to average about 2.5%, according to the firm. In September and October, prices are expected to fall around 3.2% to 3.7% per month.


NADA Used Car Guide’s full-year forecast for 2016 has prices down by an average of less than 5% on an index-basis from 2015.

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