October Downturn Came from Increasing Late-Model Supply

Jonathan Banks
Exec­u­tive Auto­mo­tive Ana­lyst
NADA Used Car Guide

October’s per­for­mance pulled NADA’s price index down by three-tenths of a point from Sep­tem­ber to 121, and down from 122.6 in Octo­ber 2013. Whole­sale prices for vehi­cles up to eight-years old fell by 3.7% from Sep­tem­ber, which was the fourth month in a row with depre­ci­a­tion at or above 3%. Prices were shaped by increas­ing late-mod­el sup­ply com­bined with wan­ing demand typ­i­cal in that sea­son.

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Incen­tives Played Less of a Role Damp­en­ing Prices than in 3 Pri­or Months:
While incen­tives mod­er­at­ed, num­ber of late-mod­el vehi­cles sold at auc­tion con­tin­ued to expand.

Off-Rental 2014 Mod­el Year Vol­ume Surged by 37% by End of Octo­ber:
Typ­i­cal off-rental vehi­cle growth through the fall sug­gests surge not quite note­wor­thy.

Novem­ber Price Loss­es Expect­ed to be Most Severe for Mid-size Vans:
Large pick­ups, industry’s best per­form­ing seg­ment, expect­ed to fall by less than 2%.

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