Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders
Hello and welcome to this week’s Used Car Market Report with insight from Black Book. Our editors have been extremely busy over the past few weeks since the start of the calendar year. The short lull in the auction business during the holidays has dealers and remarketers chomping at the bits to do business. And overall, the greatest interest right now seems to cover the vehicles that each year are very popular within the tax refund buyers.
As we looked over the commentary from the Black Book survey personnel that are scattered all over the country visiting the auction lanes, only two comments did not reference good and busy activity, with firming or stable pricing. One indicated the late models were a little down, while another described the 2015 model offerings were not as strong this past week. If there was one other less than positive comment, it wasn’t about market values, but our representative on the lanes in Wisconsin, said it was a “typical cold January day”.
For sure it was an active market with 2398 vehicles adjusted each day throughout the week with this being the most for any week during the past year. Also, reflective of the survey commentary and their positive comments, 40% of the changes overall were related to increasing values. There were almost twice as many truck related vehicles adjusted as cars, with 50% of the trucks increasing, while only 23% of the cars were increasing over the previously published value.
Let’s look at how some of the segments actually moved. Overall the cars had a -$63 average segment change. After several weeks of middle of the pack changes, the Premium Sporty Cars and the Prestige Luxury Cars required some larger changes of -$180 and -$109 respectively. Not too far behind was the Luxury Level Cars at -$94. The next highest declining car segment was the Entry Sporty Cars at -$62. There is really no surprise in any of these change levels. The higher end luxury cars generally do not have much seasonality variance and it is for sure not the time in most parts of the country where sports cars get much interest, unless you were in the Scottsdale, Arizona area this past week with some of those collector beauties. As a comparison, the overall average segment change one year ago for the cars was -$58, not much change from the current level. The Premium Sporty Cars at -$171 a year ago, was very close to this year’s level of change for that segment.
The truck market, even with all the positive adjustments we mentioned earlier, still had a higher declining average change amount week over week at -$46 this past week. The Compact SUV segment was the lone increasing segment at +$19 while the similar sized Compact Crossovers only had a small -$12 change. I have gone this long without mentioning gas prices, but with their current level at the pump at $2.14, we are a little surprised that the Luxury SUVs and the Mid-sized SUVs, both truck based platforms, required a large level of change as they declined by -$123 and -$119 respectively. The Full-sized SUVs that were at or near that level of decline the previous two weeks were at only -$59 this past week. Even the Full-size Crossovers, that get relatively good gas mileage for their size and functionality, had a larger decline of -$93. One year ago the major declining segments were the Luxury SUVs and the Full-size SUVs at -$202 and -$190. We think it is the seasonal market for less expensive units that is creating the current results, instead of being driven more so by the low gas prices. Maybe you can ask us about this in June or July.
At the end of this week several of us from Black Book will be attending the annual NADA Convention and Exposition in San Francisco. If you are in the area please stop by our booth, #913S to talk about the market or to see some of the great tools we have to help your businesses succeed.
This is a tremendous industry where something different can happen every day, thus the drive for our values being updated and available to you fresh each day. Thank you for relying on the data and market insight from Black Book to support your business efforts. Have a great day and when you see us on the auction lanes let us know what you see in the market.