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Lane watch: Bountiful ingredients keep wholesale prices cooking - Auto Remarketing

LAWRENCEVILLE, Ga. - 

You don’t have to be a famous chef or cook — someone on television or your beloved grandparent — to recognize three key ingredients currently are bountiful for searing wholesale prices.

Stir together tight wholesale volume, rising retail demand and consumers flush with federal stimulus money and you have auction metrics hotter than bread factory ovens.

Black Book spelled out the depth of the situation through its Market Insights released on Tuesday as analysts noticed overall wholesale prices jumped 1.03% this past week.

“The market continues to see consistent week-over-week growth in wholesale values as the additional round of stimulus spurred retail demand and sent dealers to the auctions to source replacement inventory from a market that was already tight on supply,” Black Book said in the newest report.

“With the release of the additional round of stimulus payments getting into consumers’ bank accounts this past week, dealers reported an increase in activity on their new and used lots. Additionally, BHPH dealers are reporting that some customers are using this money to pay off their existing loans,” analysts continued.

Black Book determined that overall car segments values jumped 1.42% compared to the previous week. That’s on the heels of a 1.12% value gain.

Analysts pointed out that prices for compact cars nearly set a record for a single-week rise, spiking 2.23%, acknowledging the segment is “in high demand due to the vehicles in this segment being in a price point that is good for tax season (and stimulus check) buying.”

Black Book noted the record came during the week ending June 19 when compact car values soared 2.29% higher.

All told, analysts said five car segments generated week-over-week gain of more than 1%, including midsize cars, full-size cars, near luxury cars and sporty cars. Even prices for premium sporty cars are on the rise as they increased by 0.61%.

Overall truck values increased 0.82%, according to the report.

Again, triggered by budget-conscious consumers, Black Book indicated prices for subcompact crossovers posted gains exceeding 1.00% for the fourth week in a row. Values for subcompact crossovers as well as luxury subcompact crossovers both jumped by 1.78% this past week to pace the truck segments.

According to the report, other notable gains within the truck segments included small pickups (up 1.31%) and minivans (up 1.26%).

Dealers looking for things to cool off in the wholesale kitchen might be waiting a while based on the trio of other observations Black Book offered in the report.

“Auction sales rates, as a percentage of total offered for sale, continue to grow, with the only no-sales being the result of sellers’ unwillingness to budge on their desired pricing and buyers being hesitant due to current retail price levels,” analysts said.

“With the release of the newest round of federal stimulus into consumers’ bank accounts and the increase in demand it spurred on dealer lots, the expectation is that used demand will continue to be strong as those dealers look to replenish their inventory after a strong week of retail sales. With this knowledge, remarketers are continuing to push their floors higher each week,” they continued.

“Supply continues to be constricted as there is a reduction in rental units returning to the market, as well as trade-ins being kept by dealers and lease turn-ins being held by the grounding dealer instead of being sent to auction,” analysts went on to say.

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Lane watch: Bountiful ingredients keep wholesale prices cooking - Auto Remarketing
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