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Buy Here Pay Here Markets Show Increased Strength

Following is this week's used car market report from Black Book managing editor, Ricky Beggs, also available by viewing the weekly video segment. As we attended the auctions, and talked with many dealers and also looked at the commentary from the Black Book survey personnel, there were three main topics of interest that kept coming up, and these are not in any particular order, a strong market, the current tax season and the rapidly climbing gas prices.


With comments like “plenty of clean cars were being offered” and “busy buyers with sellers trying hard” to “a strong Buy Here Pay Here market” the resulting final end of the week numbers supported these comments. It was definitely strong and active as the Black Book editors ended up adjusting over 2040 vehicles per day throughout the week. Supporting the previously mentioned strength, 47% of the adjustments made were increases. This has become a pattern recently as we have been at 41% or more of the adjustments increasing for the past three weeks.


The most positive activity continues to be reflective of the $10,000 and under vehicles that do so well during the spring tax season. In the continuing edgy economy, this price level appeals to so many more potential retail customers.


The third most mentioned item has become routine for this time of the year – gas prices climbing. The national average at the beginning of last week was $3.75 per gallon for gas and $4.16 for diesel fuel. With the $.39 increase for gas since the first of February it still puts us only $.16 higher than the same week one year ago. The diesel increase is pretty significant an increase but less than gas at a $.23 increase during February. Let’s look at the segment trends to see if there is any relation to the gas volatility.


Within the cars the average segment change jumped back up primarily due to the larger declining levels of only two segments, the Prestige Luxury Cars (PLC) at -$151 and the Premium Sporty Cars (PSC) at -$144. With four of the ten car segments declining by -$20 or less and two segments increasing, the car market is still pretty solid. The three segments with the best retention would fall into the perception of being more fuel efficient. Those segments and their change levels are the Entry Level Cars (ELC) at +$29, the Entry Mid-size Cars (EMC) at +$12 and the Compact Cars (SCC) with less than a dollar change. These same three segments were in the top five of retention the previous week as well.


The truck market remains pretty solid with three segments increasing for the week. Those segments were the Mid-size Pickups (MPT) at +$17, the Compact SUVs (CSU) at +$13 and the Mid-size SUVs (MSU) increasing by $4. Along with these increasing segments, five more segments declined by -$20 or less.

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Tags: beggs, black, book, car, cars, dealers, pricing, ricky, usa, used, More…vehicles


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