NADA: Rising Incentives and High Trade-In Values to Boost New-Vehicle Sales
McLean, Va. - Generous automaker incentives and high trade-in values will keep the new-vehicle sales momentum going during the third quarter, said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, in the August edition of Guidelines, a monthly report on new- and used-vehicle sales trends and used-vehicle price movement.
"Traditionally, this is the time of the year when auto manufacturers increase incentives on outgoing model year vehicles to make room for the new model year fresh off the assembly line and headed to dealer showrooms," Banks added.
In August, NADA is anticipating another month of comparatively mild depreciation for used cars and light trucks up to eight model years in age. On average, trade-in values in the August edition of the NADA Official Used Car Guide were adjusted down by 1.5%, and staying true to recent trends, downward price movement for cars exceeded trucks by – 1.7% to – 1.2%, respectively.
Auction prices for used vehicles up to eight model years in age fell a modest 1% in July 2013, a figure substantially better than the 2.6% loss in July 2012 and less than the 1.6% drop in July 2011. Prices fell 1.1% in June 2013. Through the first seven months of the year, the average auction price of used vehicles up to eight years in age was $15,064, nearly identical to $15,040 in 2012 and $518 higher than 2011's average of $14,546 compared to the same time period.
At a vehicle segment level, prices in July remained strong for large pickup trucks as well as large and midsize SUVs. Prices for large pickups remained unchanged in July, while the combined 0.6% drop in prices for large and midsize SUVs was modest. Larger losses were recorded for the compact car (– 1.8%), luxury car (– 1.7%) and midsize van (– 1.6%) segments in July.
After months of steep depreciation, values for 2011 and 2012 model year Chevrolet Volt and Nissan Leaf plug-in electric vehicles were adjusted down by a comparatively mild average of 1.8% in August, says NADA. "This slower rate of depreciation for plug-in electric vehicles over the past month may be an indication that values are beginning to settle at price points more appealing to used-car shoppers," Banks said.
While current data continues to suggest that 2013 will end with used-vehicle prices remaining at a high level, NADA expects that the pace of depreciation will accelerate to a range of 2.2% to 3% in September and October as the market enters what is typically the softest part of the year, Banks added.
More Industry

EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →
Hybrids and SUVs Gaining Ground
The most recent Kelley Blue Book Brand Watch found that only two nonluxury brands increased in shopper consideration, buoyed by their hybrid and SUV offerings.
Read More →
Dealership Profits Decline
While new and used retail sales stagnated, dealerships have been particularly supported by fixed operations and finance-and-insurance profits, according to a new report.
Read More →
New Mexico Stores Change Hands
Three dealerships owned by three brothers are renamed for a new partnership bridging the founders’ family and a new auto retail leader.
Read More →
International Automakers Overpower Domestic Output
As the current U.S. administration pushes for domestic automotive production, a new report sheds light on the prevalence of international automakers here.
Read More →
World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →