Wholesale used vehicle market ends 2015 on down note

(January 19, 2016) MCLEAN, Va. — In their first report of the year, analysts from NADA Used Car Guide, a division of J.D. Power and Associates, determined the wholesale used vehicle market ended 2015 on a bit of a down note. Prices of 8-year-old or newer vehicles fell by almost 2 percent during December.

The fall was much steeper than the 0.5 percent decline during the month for the past five years. The decline also made for the weakest December since 2003. As a result, the NADA Used Car Guide Seasonally Adjusted Used Vehicle Price Index fell by 1.6 percent from November to 122.4.

According to Jonathan Banks, executive analyst for NADA Used Car Guide, "Essentially, every vehicle segment experienced losses steeper than the past few years. With prices down an average of 2.2 percent, we saw the luxury mid-size and compact car segments decline the most in the industry."

Larry Dixon, senior manager of market intelligence at NADA Used Car Guide added, "Prices for nearly half a dozen segments fell between a range of 1.5 to 1.8 percent, with mid-size utility and luxury large car segments failing to exceed 1 percent."

The monthly report notes that despite December's softness, 2015 was one of the strongest years on record from a net perspective. Used vehicle prices slipped by just 0.3 percent from 2014's all-time high average. While depreciation increased from 12.7 percent to 14 percent, the rate of decline remained historically moderate.

The report concludes its used vehicle market analysis with a forecast of things to come. In the first quarter of 2016, prices of 8-year-old or newer vehicles will be flat-to-up a slight 0.5 percent in January versus December. Prices are then expected to rise by roughly 1 percent per month in February and March.