Rise in used-vehicle prices loses steam
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Prices of late-model, fuel-efficient used vehicles remain strong, some dealers and analysts say, but compared with earlier this year the prices are rising more slowly or even falling slightly.
Still, low inventory levels are expected to continue to buoy used-vehicle prices, making it difficult for dealers seeking certain used cars and trucks.
Steve Ewing, owner of Wade Ford in Smyrna, Ga., says he has called wholesalers and has his buyers looking for clean 2007-09 domestic vehicles such as the Ford Focus, Ford Escape and Chevrolet Cobalt that he can retail for $7,500 to $12,000. He is coming up empty-handed.
Ewing is keeping almost every vehicle he takes as a trade-in and reconditioning it for retail sale. It's still not enough.
"I'd call it a used-car inventory drought," he says.
Used hybrid values slip
Despite the drought, says Alec Gutierrez, an analyst at Kelley Blue Book, prices of used fuel-efficient vehicles are not rising as rapidly as they did earlier this year when gasoline climbed to $4 per gallon, and some are falling.
In the week ending March 30, Kelley Blue Book data show that wholesale auction prices of 2009-11 hybrids, such as the Toyota Prius, Honda Insight, Toyota Camry Hybrid and Honda Accord Hybrid, increased an average of 3.5 percent. The week ending April 20, the average price of those vehicles dropped about 1 percent.
In that same period, prices of 2009-11 subcompact cars such as the Honda Fit, Nissan Versa and Toyota Yaris did not decline, but their rate of increase slowed, from a 1 percent gain the week ending March 30 to a 0.5 percent rise the week ending April 20.
"We are still seeing some strength in wholesale values of [fuel-efficient] vehicles, however it is significantly less than what we were seeing three or four weeks ago," Gutierrez says.
'Pretty solid' prices
Ricky Beggs, managing editor at Black Book, says overall used-vehicle wholesale prices over the past two months have been "strong or at least pretty solid" but were not "as aggressive" in the last 10 days or so of April.
Black Book monitors and reports daily changes in used-vehicle prices based on auction transactions. In the last week-and-a-half of April, only 44 percent of the price adjustments that the guide tracked were increases, down from 50 to 60 percent during the previous eight consecutive weeks, Beggs says.
Steve Landers, president of RLJ McLarty Landers Automotive Holdings, is among the dealers who have seen used-vehicle prices retreat, at least somewhat.
On April 26, at an auction in Dallas, he bought 2010 and 2011 four-cylinder Toyota Camrys for $14,000 to $14,500. He says the prices of those vehicles 30 days earlier had been around $16,500. Landers had refused to buy the vehicles at the higher prices.
His rationale: "We didn't pay out of book value for them because gas prices always fluctuate in the summer."
You can reach Arlena Sawyers at asawyers@crain.com.
