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Increase In 2012 New Car Sales to Impact Used Sales in 2013?

Here is this past week's used car market report from Ricky Beggs and Black Book. The final new car sales numbers for 2012 have been reported and December met most expectations with an impressive 9% increase compared to December 2011.
Even stronger was the total year over year increase of 13% to finish at 14.49 million according to reports within Automotive News. Maybe the interest and level of new sales was the major driver holding back the used wholesale activity of the most recent week. 
More new sales equals more trade-ins which equals less additional sourcing for used inventory.
Another area of the used market in the news since the beginning of 2013 related to the purchase of Zipcar by Avis Rental car. This immediately added 11,000 additional in service units to the Avis portfolio while creating even larger growth and revenue opportunities for Avis. A nice mix for them and yet Black Book feels there will be no adverse effects on retention values for Avis re-marketing or the overall used market.
Let’s get back to the actual market changes for the week. Even though the consignment was reduced, the need for adjustments was still pretty strong, with an average of just over 2110 vehicle changes each day throughout the past week. One significant difference was the number of adjustments that were increases. With the previous 6 weeks of 31% up to 50% of the adjustments being increases, the 25% level this past week is more in line with the levels seen from last October to the early part of November prior to the market being driven up due to the demand for cars in the northeast portion of the country.
With fewer increases, only 2 of the 24 segments showed positive changes overall, the Full-size cargo and passenger vans at +$17 and +$14 respectively. These two have shown strength now for the past 4 weeks. With a 15% normal annual depreciation broken down to a 1.25% per month decline and a .3% weekly level, only 3 truck segments, the Compact Pickups, the Mid-size Pickups and the Cargo Minivans, and 2 car segments, the Upper Mid-size Cars and the Premium Luxury Cars, resulted in softer markets or larger than normal % changes this past week.
One year ago the overall market was very similar in both % and $ change. The cars this past week at -$40 and -.27% was just slightly weaker that the first week of January 2012, which reported in at -$33 and -.23%.
The trucks year to year change was even more similar than the cars. The most recent weekly results of -$23 and -.17% was almost identical to a year ago at -$21 and -.16%. I must say these are pretty solid retention levels. Moving forward, let’s see if the strong new car sales of November and December 2012 and the overall annual sales of 14.49 million continues to hold back the used wholesale market.

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


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