Used-Car Market Report

BLUE
BOOK
Used-Car Market Report
APRIL
2013
Automotive Insights from Kelley Blue Book
Kelley Blue Book Public Relations Contacts:
Chintan Talati | Senior Director, Public Relations Joanna Pinkham | Senior Public Relations Manager
949.267.4855 | [email protected]
949.268.3079 | [email protected]
Brenna Robinson | Public Relations Manager
949.267.4781 | [email protected]
Natalie Kumaratne | Public Relations Coordinator
949.267.4770 | [email protected]
In This Issue:
USED-CAR MARKET ANALYSIS:
Peak Comes Early at Dealer Auctions, Thanks to Mild Fuel
Prices and Increased Supply
- Alec Gutierrez, senior market analyst, automotive insights, Kelley Blue Book
USED-CAR MARKET ANALYSIS
Peak Comes Early at Dealer Auctions, Thanks to Mild
Fuel Prices and Increased Supply
Values Drop 1.7 Percent Year-Over-Year on Average,
Expected to Remain Down
Trucks Hold Steady on Improving Housing Market
T
he typical spring market uptick was relatively mild this year, as used-car values increased
only 2 percent in Q1. The 2 percent bump was just below the 3 percent increase from last
year, and far shy of the 6 percent gain in 2011. Although values have eased as supply has
improved due to slight increases in off-lease units in recent months, recently cheaper gas is helping
to keep values in check so far this year. Gas prices currently are more than $0.30 per gallon less
than they were at this time last year and continue to fall.
Values of Small Cars Ease After Rising Sharply in March
Growing Availability of Hybrids at Auction Brings Prices
Back Down to Earth
Full-Size and Mid-Size Sedan Values Increase in Q1
Used Luxury Posts Only 1.4 Percent Gain in Q1
Cheaper gas prices and improving supply at auction not only kept Q1 appreciation to a
minimum, it brought the spring market uptick to an early end with values expected to drop close
to 0.5 percent in April. The peak came approximately 2 weeks earlier this year than in 2012, and
more than a month earlier than in 2011. With supply conditions at auction expected to continue
improving and fuel prices expected to remain below levels seen last year, Kelley Blue Book believes
used-vehicle values likely will decline between 1 to 3 percent in the second quarter, and will
continue to drop modestly throughout the rest of 2013.
7.0%
Spring Market Uptick Lags Previous Years
5.9%
6.0%
5.0%
4.0%
3.0%
2.0%
3.0%
2.0%
1.7%
0.9%
1.0%
0.0%
-1.0%
-2.0%
April Change in Auction Values
CY2011
Q1 Change in Auction Values
CY2012
-0.5%
CY2013
Source: Kelley Blue Book Automotive Insights
WITH SUPPLY CONDITIONS AT
AUCTION EXPECTED TO CONTINUE
IMPROVING, USED-VEHICLE
VALUES LIKELY WILL DECLINE
BETWEEN 1 TO 3 PERCENT IN
THE SECOND QUARTER.
- ALEC GUTIERREZ
Values Drop 1.7 Percent Year-Over-Year on Average, Expected to Remain Down
U
sed-vehicle values were down in nearly every segment in April, with the average used vehicle selling approximately 1.7 percent below prices paid at this
time last year for similarly aged vehicles. Hybrid vehicles experienced the most significant declines, with values more than 12 percent below last year’s
levels. Values of used hybrids have been kept low by cheaper gas prices and attractive finance offers on new hybrid models. For example, Toyota’s
$239 per month, $1,999 down lease on the 2013 Prius is certainly catching the attention of consumers, but putting downward pressure on values of the used
2012 Prius, which is currently selling for more than $2,000 below prices paid at auction in 2012. Mid-size cars also are relatively soft year-over-year, due in
large part to the strength of the model-year 2013 redesigns for the Honda Accord, Ford Fusion and Nissan Altima. Due to improving supply conditions at
auction, attractive new vehicle finance offers, and cheaper gas prices, Kelley Blue Book expects used-car values to remain down year-over-year, likely ending
the year 3 to 5 percent below prices paid in 2012.
USED-CAR
MARKET ANALYSIS:
continued
YoY Change in Auction Value
Average Value of 1- to 3-Year-Old Vehicles
Luxury Car
$30,031
Luxury Compact SUV/Crossover
Full-Size SUV/Crossover
Luxury Compact SUV/Crossover
-5.5%
$25,425
Entry-Level Luxury Car
$19,770
Full-Size Pickup Truck
$19,607
Grand Total
$17,061
Hybrid/Alternative Energy Car
$16,906
Compact SUV/Crossover
$16,743
Full-Size Car
$15,000
Mid-Size Pickup Truck
$14,823
Mid-Size Car
Mid-Size SUV/Crossover
-3.9%
Grand Total
-1.7%
Minivan/Van
-2.6%
Hybrid/Alternative Energy Car
-12.3%
Full-Size Car
-4.0%
$5,000
$10,000
$15,000
Mid-Size Pickup Truck
1.3%
Mid-Size Car
-5.6%
Compact Car
-1.0%
Subcompact Car
3.4%
$11,027
$0
Compact SUV/Crossover
0.0%
$12,547
Subcompact Car
Full-Size Pickup Truck
1.8%
$13,685
Compact Car
Entry-Level Luxury Car
-2.7%
$18,055
Minivan/Van
Full-Size SUV/Crossover
-1.3%
$22,370
Mid-Size SUV/Crossover
Luxury Car
-1.6%
$28,589
-15%
$20,000
$25,000
$30,000
-10%
-5%
0%
5%
10%
$35,000
T
he market for used full-size pickup trucks was stable in April with
only nominal depreciation. Values for full-size trucks were down
less than a quarter of a percent from the beginning of April, and
only 0.1 percent lower when compared month-over-month to values
in March. The average value of all 1- to 3-year-old trucks fell 0.8
percent year-over-year from the April 2012 average. These declines go
against the trend seen in both 2011 and 2012, where values for fullsize trucks reached their peak in late April, but they are not surprising
given the liberal supply levels and incentives currently available on new
trucks. It is likely that values for used trucks would have dropped more
significantly, if not for the strengthening construction and housing
industries.
KBB Auction Value
(1- to 3-Year-Old Vehicles)
Trucks Hold Steady on Improving Housing Market
$20,500
$20,000
$19,500
$19,000
$18,500
$18,000
$17,500
$17,000
$16,500
$16,000
$15,500
$15,000
1-Jan
Used Trucks Holding Steady
CY 2011
1-Feb 1-Mar
1-Apr
1-May
1-Jun
1-Jul
CY 2012
CY 2013
1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
Source: Kelley Blue Book Automotive Insights
The U.S. Department of Housing and Urban Development reported the number of new privately-owned housing starts rose 7 percent in March from
February, and 46.7 percent compared to March 2012. Much of this growth came from larger projects, as construction starts for structures with five or more
units increase an impressive 26.9 from February 2013 and 82.3 percent from March 2012. Additionally, the available supply of used trucks at auction has
not kept pace with the ramp-up in demand; the volume of full-size trucks sold at auction in Q1 2013 only rose 0.6 percent from the first quarter in 2012.
Despite the readily available discounts in the new truck market, there should not be excessive downward pressure on the used market, considering the
growing demand fueled by the housing industry and relatively constrained supply of used full-size trucks.
Values of Small Cars Ease After Rising Sharply in March
W
hile auction prices for the used small-car segment are
up on a year-to-date basis, it appears this will not be the
case much longer. March saw a seasonal surge in usedcar pricing, and while a number of vehicles appreciated as much
as 8 percent (with a few rising even higher), the spike was short
lived. Halfway through April, the market already is giving back
those inflated figures. The Ford Fiesta raised a sharp 7.92 percent
in March, and while the popular subcompact had some of the
highest appreciation across the segment, it already has given back a
substantial 1.46 percent of those gains by mid-April. As the month
comes to a close and gas prices continue to tumble, Kelley Blue
Book expects further declines across the small car segment.
Compact Car Segment Overview
Vehicle
January (%)
Ford Focus
2.47%
Mazda Mazda3
0.60%
Chevrolet Cruze
-1.45%
Toyota Corolla
-0.47%
Nissan Sentra
-2.36%
February (%)
0.19%
1.95%
0.52%
0.34%
4.67%
March (%)
5.84%
3.47%
5.04%
4.07%
3.58%
April (%)
-1.07%
-0.44%
0.75%
-1.01%
-3.03%
YTD Change
7.51%
5.65%
4.83%
2.90%
2.65%
Source: Kelley Blue Book Automotive Insights
Subcompact Car Segment Overview
Vehicle
January (%)
February (%)
Nissan Versa
-1.54%
1.05%
Toyota Yaris
-0.25%
1.75%
Kia Rio
0.68%
0.88%
Ford Fiesta
-3.00%
1.45%
Chevrolet Sonic
-1.33%
2.25%
March (%)
6.04%
3.67%
4.99%
7.92%
4.40%
April (MTD)
1.72%
0.89%
-1.53%
-1.46%
-1.68%
YTD Change
7.32%
6.16%
5.00%
4.64%
3.55%
Source: Kelley Blue Book Automotive Insights
2 BLUE BOOK Used-Car Market Report
APRIL 2013
USED-CAR
MARKET ANALYSIS:
continued
Growing Availability of Hybrids at Auction Brings Prices Back Down to Earth
F
Q1 Volume Year-Over-Year Change
irst quarter 2013 gave way to growing auction sales for the
Auction Volume Growing for Used Hybrids
hybrid vehicle segment, with volume for the first three months
30%
26.0%
of the year more than 20 percent higher than Q1 2012.
25%
Volume increased in the first quarter for many popular hybrids such
20%
16.0%
as the Toyota Prius and Honda Insight, thanks in part to strong lease
15%
programs offered for each of these models during the past several
10%
years. As hybrid volume increased, prices have decreased, with the
5%
average hybrid currently selling approximately 12 percent below
0%
prices paid last year. Hybrid values will likely continue to decline
-5%
-3.4%
as supply grows in future years, due to the surge in new hybrid
-10%
models that have been introduced by manufacturers during the past
CY2011
CY2012
CY2013
Source: Kelley Blue Book Automotive Insights
several years. In the past three years, the used-car hybrid market
has grown an average of 29 percent per year in terms of new-model
introductions, and additional hybrids come to market every year. Kelley Blue Book expects this trend to continue. As consumers continue to adopt hybrid
powertrains and manufacturers continue to offer new hybrid introductions, Kelley Blue Book foresees additional modest softening in values of hybrid
vehicles. impressive sales numbers, the Elantra overtook both the face-lifted Chevrolet Cruze and Ford Focus in market share, gaining an impressive 11.9
percent to put the Elantra in third place for overall market share within the segment. In addition to increasing share, Hyundai saw a 1.6 percent increase in
average transaction prices in March, as the average Elantra sold for approximately $20,300. It also is striking that the Elantra body style remains unchanged
since 2011; however, Hyundai has added a two-door coupe and five-door hatchback GT to the 2013 Elantra lineup.
Full-Size and Mid-Size Sedan Values Increase in Q1
$16,000
KBB Auction Value
(1- to 3-Year-Old Vehicles)
I
n the first quarter, auction values of full-size sedans slightly
outperformed the more popular mid-size sedans, with auction
values up by 2.28 percent and 1.44 percent, respectively. Values
of full-size sedans were helped by a decline in auction volume likely
triggered by reduced availability of vehicles like the Ford Crown
Victoria, which was a favorite of municipal and taxi fleet operators
prior to ceasing production after the 2011 model year. Sales volume
of full-size sedans at auction decreased 7.34 percent year-over-year
in the first quarter, while the volume of mid-size sedans increased by
1.79 percent.
Mid-Size Cars Steady Through April, Down YoY
$15,000
$14,000
$13,000
$12,000
$11,000
CY 2011
$10,000
1-Jan
1-Feb 1-Mar
1-Apr
1-May
1-Jun
1-Jul
CY 2012
CY 2013
1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
Source: Kelley Blue Book Automotive Insights
Despite the lower volume at auctions, values of full-size sedans
are down 2.35 percent year-over-year, slightly outpacing the average
decline of 1.7 percent for the industry. Consumers looking for a little extra leg room typically opt for a mid-size sedan, due to their more affordable price
point, better fuel economy, and comparable size and feature set. Although mid-size sedans typically are favored by consumers, the latest batch of redesigns
has put downward pressure on values of used mid-size offerings. In fact, the typical used mid-size car is down 4.0 percent year-over-year, underperforming
the less desirable full-size segment. Used mid-size and full-size sedans are expected to remain soft for the foreseeable future, especially as the latest redesigns
arrive at auction.
Used Luxury Posts Only 1.4 Percent Gain in Q1
3 BLUE BOOK Used-Car Market Report
APRIL 2013
$30,000
KBB Auction Value
(1- to 3-Year-Old Vehicles)
U
sed-luxury models, which are known for their steep
depreciation, posted modest gains in the first quarter of the year,
with the average auction value rising 1.4 percent to $28,763.
While in contrast to last year’s drop of 1.5 percent, the luxury market
still finished the first quarter 2.3 percent lower than 2012. In fact,
since mid-January, average auction values for used luxury vehicles were
essentially unchanged. While new-car luxury vehicle sales were up
14.6 percent in the first quarter, overall auction volume on used luxury
units declined 4.2 percent from 2012. Buoyed by low interest rates
and attractive leases, Kelley Blue Book is watching buyers shift toward
new luxury units, creating downward pressure on used values.
Luxury Models Down Year-Over-Year
$29,500
$29,000
$28,500
$28,000
$27,500
$27,000
$26,500
$26,000
$25,500
$25,000
1-Jan
CY 2011
1-Feb 1-Mar
1-Apr
1-May
1-Jun
1-Jul
CY 2012
CY 2013
1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
Source: Kelley Blue Book Automotive Insights
USED-CAR
MARKET ANALYSIS:
continued
Although values of used-luxury vehicles were up in the first quarter, they dropped an average of 0.5 percent in April, slightly outpacing the 0.2 percent
average industry decline. The only segment showing signs of strength was compact luxury crossover/SUVs, where the BMW X3 posted gains of 2.2 percent.
High-end luxury cars were the hardest hit, as BMW 7 Series values dropped 3.4 percent and Mercedes-Benz S-Class models declined by 2.8 percent.
Looking forward to the second quarter, Kelley Blue Book anticipates greater off-lease volume to hit the market than in previous years, further driving down
values. Throughout the remainder of 2013, luxury values are likely to decline faster than the overall market, and drops in the second quarter can be expected
around 3 percent.
The statements set forth in this publication are the opinions of the authors and are subject to change without notice. This publication has been prepared
for informational purposes only. Kelley Blue Book assumes no responsibility for errors or omissions.
HOT USED-CAR REPORT:
Spring Fling
- Arthur Henry, manager of market intelligence and market analyst, Kelley Blue Book
Kelley Blue Book’s Hot Used-Car Report captures monthly used-car shopper activity on KBB.com, including a list of the top and bottom movers in the same time
period. Results are provided by the Kelley Blue Book Market Intelligence Team, in an effort to help dealers better understand which used vehicles consumers are looking
at most each month.
G
as prices are falling, the nation is starting its winter thaw and KBB.com shoppers are showing us that this is a good time to be a car enthusiast. This
is represented in their vehicle choices, and this month shopping interest increased for all performance vehicles. From compact luxury cars to highperformance vehicles, share of shopping traffic has increased between 2.4 percent to 6.4 percent. Typically in March, shoppers begin to shift their
interests away from utility vehicles and more toward performance-oriented vehicles, but it has been tempered in the past few years due to high gas prices.
Now that gas prices are not a major concern, a wide range of vehicles are popping up on the radars of shoppers. Vehicles experiencing an increase include the
Audi A4, BMW 1 Series, BMW 3 Series and Mercedes-Benz C-Class.
Another vehicle that has piqued shopper attention is the Pontiac Vibe. Owners rate this vehicle 9.2 out of 10 and praise the Vibe for its reliability and
utility. Owners also are aware that the Vibe is essentially the same vehicle as the Toyota Matrix, which is on the Corolla platform. The 2010 Vibe is currently
valued (suggested retail price) just below $15,000 and appears to be a great vehicle if you’re looking for roominess on a budget.
Monthly Used-Car Shopping Activity Growth
Top/Bottom 10 Models
Monthly Used-Car Shopping Activity Growth Segments
2010 PONTIAC VIBE
46.2%
High Performance
6.4%
2007 PONTIAC VIBE
45.0%
Compact Luxury Car
5.7%
35.3%
2009 BMW 1 SERIES
2011 AUDI A4
Entry Luxury Car
3.1%
19.9%
Premium Sports Car
2.6%
18.3%
Sports Car
2.4%
13.3%
Van
2.2%
2011 FORD FUSION
12.0%
Mid-Size Pickup Truck
2.0%
2010 MERCEDES-BENZ C-CLASS
11.3%
Luxury Car
2.0%
2011 MERCEDES-BENZ C-CLASS
2010 BMW 3 SERIES
2011 HONDA CIVIC
9.8%
Full-Size Crossover
1.3%
2010 TOYOTA RAV4
9.2%
Subcompact Car
0.5%
2007 NISSAN ALTIMA
-10.1%
2007 CHEVROLET IMPALA
-12.5%
2011 NISSAN VERSA
-15.6%
-18.5%
2007 CHRYSLER PACIFICA
2007 CHRYSLER SEBRING
-22.5%
2011 DODGE CALIBER
-23.9%
2007 DODGE MAGNUM
-24.2%
-44.1%
2009 INFINITI QX
-65.6%
2010 BMW X6 M
-67.8%
2009 AUDI S8
-200%
-100%
0%
100%
200%
% Change in Share Month-Over-Month
Information based on 2011 to 2007 Model-Year Vehicles
Compact Car
0.5%
Premium Luxury Car
0.5%
Compact Crossover
0.3%
Full-Size Pickup Truck
-0.2%
Luxury Crossover
-0.2%
Mid-Size Car
-0.7%
Minivan
-0.9%
Hybrid Car
-1.1%
Luxury Sport Utility
-2.0%
Mid-Size Crossover
-2.4%
Mid-Size Sport Utility
-2.5%
Full-Size Car
-2.7%
-3.9%
Full-Size Sport Utility
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
% Change in Share Month-Over-Month
About Kelley Blue Book (www.kbb.com)
Information based on 2011 to 2007 Model-Year Vehicles
Founded in 1926, Kelley Blue Book, The Trusted Resource®, is the only vehicle valuation and information source trusted and relied upon by both consumers and the industry.
Each week the company provides the most market-reflective values in the industry on its top-rated website www.kbb.com, including its famous Blue Book® Trade-In and
Suggested Retail Values and Fair Purchase Price, which reports what others are paying for new cars this week. The company also provides vehicle pricing and values through
various products and services available to car dealers, auto manufacturers, finance and insurance companies as well as governmental agencies. KBB.com provides consumer
pricing and information on cars for sale, minivans, pickup trucks, sedan, hybrids, electric cars, and SUVs. Kelley Blue Book Co., Inc. is a wholly owned subsidiary of
AutoTrader Group.
4 BLUE BOOK Used-Car Market Report
APRIL 2013
`