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Entry Midsize Cars Showing Price Stability

Here is the latest used-car market report from Ricky Beggs, Managing Editor at Black Book. Over the last couple of years many of us in the industry have said we are not in a normal market. This has referenced supplies, value trends that have seen both up and down movements and some of those trends do not match the more historical patterns. A specific current example is the 31% plus level of adjustments that are raises to the previously published value for each of the past 3 weeks. This level of strength is typically only seen in the March/April time of the year. When I say it is not your normal December market one only has to stand on some of the auction lanes or watch some of the online offerings and then to see the comments passed along by the Black Book survey personnel.

While we try to talk with as many auction managers and owners as possible each week, as well as the auctioneers, I also look forward to the video market report posted by John Brasher of Brasher’s Sacramento. This past week John described his auction as “much stronger than a typical winter market”. He continues to be amazed at how we are all talking about how strong the market is. It is not just Brasher’s Sacramento with this level of strength in the market on the west coast but the Black Book survey person at Manheim Seattle described the increasing market was probably because of the east coast vehicle demand.

As I looked at the comments in the survey reports, one of the multiple mentioned items referenced the interest and demand for 3-5 year old models. This age of vehicle has been in low supply due to many of today’s trades being older than normal and also that we are at the lowest point in supply of end of term leases coming into the market. And don’t forget this 3-5 year old type vehicle fits a very affordable used price level as well as being a great CPO candidate.

Let’s take a look at some of the most recent segment movement. The overall car segment change at -$55 was the 3rd lowest average segment change since back in August 2012, 17 weeks ago. The best retention level was within the Compact Car segment at -$19. For the past 4 weeks this segment change has averaged -$19. The Entry Mid-size Cars at -$24 this past week, have been almost as stable as the Compact Cars with a 4 week average decline of -$22.

The Entry Level Cars at -.89% or -$55 have now declined by at least one half a percent for each of the past 3 weeks. This is the only car segment with this level and consistency of decline.

Where two weeks ago there were 3 truck related segments that increased, this past week there were only two, the Compact SUVs at +$6 and the Full-size Wagons at +$3. There were three other segments with very small declining levels, the Mini Cargo Vans at -$4, the Full-size Cargo Vans at -$7 and the Full-size Pickups at -$10. Two of these have been mentioned quite often as segments that could show an increase in values based on the needs from the hardest hit areas related to super storm Sandy, and now this is actually taking place.

As the Black Book editors hit the lanes this week, when they returned to the office near the end of the day, the summaries they passed along to the team were all primarily referencing the strong activity, lower no sale levels and stable prices. The resulting actual market adjustments were reflective of the lane activity. So being half-way through December, and as the title of this video blog says, this is not your normal December market.

Views: 26

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

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