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Following is the Used Car Market Report this week from the editors of Black Book. It is hard to believe another year has come and gone. It is exciting to think about what’s ahead within the used market as volumes continue to increase, the age of the trades start to return to the more traditional and steady mix, and the tools and services at hand within the wholesale industry that assist everyone in their quest to succeed.
If we had to narrow it down to only a couple of factors supporting the growing used market it would be the availability of quality used cars to meet consumer demand and the availability of funding for both dealers and consumers which makes the used car a solid proposition.
I look forward each week to see how the market values have changed and relating those changes to which factor or factors that are behind the fresh values. We trust that our insight supports your latest market decisions.
The past couple of weeks, with the holidays right in the middle of the week, have definitely had an impact on the market. Sure the overall activity has been reduced but the prices and their necessary adjustments are reacting to a more long term market, not just a special one or two week reaction. The average segment change week over week for both cars and trucks did having higher declining levels finishing at -$53 or -.35% for the cars as compared to the previous week at -$40 and -$69 or -.5% for the trucks in relation to the -$59 change the prior week.
When looking at the percentage change by segment type it appeared that the smaller vehicles, those within the Entry Level Cars at -.83% and the Compact Cars at -.43% were not helped, as gas prices have started their seasonal increase this past week, coming in $.04 higher week over week. This puts gas at $.01 higher than a year ago. If this past winter is any indication, get ready for a significant increase over the next two months or so. Last year during the first two months of the year the increase was $.52 per gallon.
One segment that reacted with the smaller level of depreciation was the Entry Mid-size Car at -.22%. This is a car segment that represents good size and fuel economy and probably reaches out to a greater group of buyers, thus the better overall retention. Others with better than the car segment overall average were the Entry Sporty Cars at -.24%, the Near Luxury Cars and Premium Sporty Cars both at -.26% and not too much greater the Luxury Level Cars at -.31%. I think this indicates a market where the signs of a continually improving economy are encouraging consumers to step up and move up.
The truck market continues to find a new level with the average segment decline increasing for the fourth consecutive week to -$69 this past week. The greatest percentage declining segment was the Full-size Passenger Vans at -1.07%. This segment has almost been seen as a roller coaster market over the past nine weeks, having a couple of weeks of miniscule -.04% and -.05% changes to a couple of weeks of -1.22% and -1.18% changes. The extreme ends of the changes were not back to back weeks. The cargo versions have reacted similarly. These segments are driven primarily from sellers within the fleet and commercial segments. The minivan segments, while more consumer driven, have adjusted more steadily over the past seven to eight weeks.
One of the bigger week over week swing changes appears with the Full-size Crossovers. This past week at -.11% and -$22, four of the previous five weeks have had much greater level over -$100 changes.
Next week we hope to bring you our annual interview with the current leadership of the National Auto Auction Association. Their thoughts on the market and plans to support the wholesale market channels are always insightful.
Until then, thank you for your use of the Black Book products and services and your interest in these video blogs. Have a safe New Year celebration and we wish for each of you a prosperous year. We will see you back on the auction lanes throughout 2014?