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Here is this week’s edition of Beggs on the Used Car Market. It’s great to have you tune into as we face the final full week of 2012. As we look back over the past couple of months, the weather has been pretty mild across most of the country until last week when a full blown winter storm came across the Rockies, the western plains and up through the mid-west. Even the upper part of the southeast got some of the white stuff. This may be a good thing for sellers of trucks and SUVs with 4WD.
The strong demand and activity that began the second week of November has continued throughout December and continues to be driven by the strong demand to replace the damaged and destroyed vehicles of Hurricane Sandy. The storm continues to be a factor as evidenced by a comment from one of the Black Book survey personnel from Pennsylvania as he said “Sandy is pushing prices”. Besides, why else would we be having over 30% of the adjustments being increases for each of the past 5 weeks during this time of the year, with a 42% rate this past week?
Within the 10 car segments the -$43 average segment change is the lowest declining weekly mark over the past 4 weeks. 6 of the 10 car segments, ranging from the Entry Level Cars to the Prestige Luxury Cars, had their smallest weekly decline over the past month.
One year ago the car market was not as strong at a -$52 average segment change. This year only 3 of the individual segments had larger declines than a year ago, the Luxury Level Cars, the Premium Sporty Cars and the Upper Mid-size Cars. And then again, the seemingly annual catastrophic events from last year didn’t force the volume of cars that had to be replaced like Sandy has.
If you think the cars were strong for this time of the year, wait until you see the adjustments for the trucks, vans and SUVs. For the overall truck segment change, this past week was a positive change of +$5. This is the first time a positive change has appeared since a 5 week run of increases from March 9 through April 6, 2012.
Right after Hurricane Sandy, Black Book reported our expectations that the used market values for Full-size Trucks and Full-size Vans would show the strongest stability and strength in vehicle values in order to meet the vehicle replacement and rebuilding needs of the damaged east coast areas. These 3 segment types have been drivers of more stable truck segment changes, and especially so this past week with their positive segment changes. The Full-size Pickups at +$4 was a minor level as compared to the Full-size Cargo Vans at +$261 and the Full-size Passenger Wagons at +$266. This is now 2 consecutive weeks of positive changes for the cargo vans and 3 consecutive weeks of increase for the passenger wagon versions.
Added to these 3 positive trending segments were 4 segments that declined $26 or less, making ½ of all 14 truck segments with a less that ¼ of 1 percent (-.22%) weekly decline.
Looking ahead for this week and next the auction schedules will be all shuffled up, but there will be online offerings to meet your almost instant used inventory needs. The Black Book Daily used values will take a couple of days off this week and 1 day next week in conjunction with the physical auctions.