It's no secret that the used car market is in a state of flux. As gas prices rise and fall, so does the value of the car currently sitting in your driveway, waiting to be traded in. To help dealerships assign a fair value to your car, the National Automobile Dealers Association has added two new categories for wholesale vehicle market. The new categories are "Rough" and "Average" and they join "Clean Trade-In," "Clean Loan" and "Clean Retail" as options for your ex-vehicle to fall into.

According to NADA, roughly half of all trade-ins will fall into the newly established "Average" category. As you might imagine, "Rough" vehicles have seen a bit more wear and tear than is typical. Then there's the good old "Salvage" bucket for cars which have seen much better days. You won't necessarily know what bucket a dealership is assigning to your particular vehicle as these categories are to be used in the wholesale market only. Still, the dealership is keenly aware that it may need to rid itself of your trade-in and the business-to-business market may be its best bet. In other words, you may be indirectly touched by these new standards.

[Source: NADA]


Press Release:

NADA Used Car Guide Adds 'Rough' and 'Average' Trade-In Values

Enhanced Information Helps Businesses Assess Used-Vehicle Pricing in Volatile Wholesale Market

NADA Used Car Guide has introduced two additional trade-in value categories to help businesses better define used-vehicle pricing for a broader spectrum of vehicles.

Beginning this month, new "Rough Trade-In" and "Average Trade-In" values are included in all NADA Used Car Guide electronic products, and will be part of the printed guidebook in October, as a complement to the existing "Clean Trade-In," "Clean Loan" and "Clean Retail" values.

"These enhancements provide our customers -- dealers, lenders, and insurance and remarketing professionals -- with more information for assessing used-vehicle values in the wholesale market," said Mike Stanton, vice president and chief operating officer of NADA Used Car Guide.

The majority of vehicles in the wholesale market -- about 50 percent -- are considered "Average" in condition, according to NADA market data. Vehicles in the "Clean" category represent about 15 percent of the market, while those in the "Rough" category -- typically considerably damaged, but not "Salvage" vehicles -- are about 20 percent. The remaining vehicles fall into the "Extra Clean" or "Salvage" unit category.

NADA AuctionNet data on used-vehicle pricing reflects the volatile nature of the market and impact of fluctuating gas prices, as well as the challenges businesses face in assessing values in today's environment.
Wholesale prices of large pickup trucks rose in August by 7.7 percent -- or about $900 -- compared to their June low point when gas prices peaked, yet remain down 14.5 percent year-to-date, according to AuctionNet data.
Similarly, large sport utility vehicle (SUV) values jumped 8.9 percent -- or about $1,300 -- in August since June, but have declined year-to-date by 11.3 percent.

Values of intermediate compact cars continued to rise in August, though at a more moderate pace than earlier in the year, up 2.1 percent -- or about $200 -- since June. Year-to-date, intermediate compacts have increased in value by 22 percent. NADA's analysis adjusts for mileage, vehicle age and model mix.
"The rebound in resale prices in large segments, as well as the moderating prices in the compact car segment, is consistent with the 25-to-30 cent retreat in gas prices," said Terrence W. Wynne, director of editorial and data services for NADA Used Car Guide.

"This is what we expected given our estimates of how gas prices impact resale prices," he added. "Movement in these gas-sensitive segments will continue to be determined by how gas prices change."
To learn more about all of NADA Used Car Guide's vehicle value categories, as well as its full lineup of electronic and print products and services, visit www.nada.com/b2b.
About NADA Used Car Guide

Over a 75-year history, NADA Used Car Guide has earned its reputation as the leading provider of market-reflective vehicle valuation products, services and information to businesses throughout the U.S. and worldwide. NADA's editorial team collects and analyzes over one million combined wholesale and retail automotive-related transaction prices per month. Its guidebooks, auction data, analysis, and data solutions offer automotive, financial, insurance, and government professionals the timely information and reliable solutions they need to make better business decisions. For more information, visit www.nada.com/b2b.