Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders
Here is the latest edition of Beggs on the Used Car Market. It has been a great week for the Black Book team. We have had the opportunity to hit the auction lanes and airwaves gathering data and market intelligence, with additional insight from many auction personnel and dealers on the lanes. I even had the opportunity to get some insight from some auto lenders this past week. Another milestone and exciting opportunity because of recent growth has provided the need to open a second Georgia office for Black Book in Atlanta. This gives the many guests who visit with us easier and quicker access to our team. Our phone numbers and email addresses all remain the same.
The market continues to behave as we expect overall. The activity was about the same this week with the need for additional adjustments due to the market working to make room for another model year of vehicles to enter the market. This past week that number of adjustments rose to 1,945 per day. With only 16% of those adjustments being increases, we have the lowest level within the past four weeks and the second lowest number of percentage increases during the past year. With the larger level of overall adjustments and the lower level of increases, you are probably wondering how soft the overall market was this past week.
Car And Truck Segment Performance
Within the cars, the average segment change is as consistent over the past four weeks as you could expect, -$43 this past week after changes of -$41, -$42 and -$41 each of the previous three weeks. Compared to a year ago, the cars are maintaining value slightly better this year as compared to year the ago change of -$50. The softer segments within the cars this past week, percentage wise, were the Entry Level Cars at -1.02%, the Full-size Cars at -.58%, followed by the Entry Mid-size Cars at -.52%. An interesting point is these same three segments led the percentage change declining level a year ago as well.
The truck segments continue to require greater downward change this past week at -$68 or -.54%. A year ago we were at -$47. The last time we saw the trucks change at least at this current level was back at the week ending November 9, 2012 at -$70. With a couple of segments declining over $100 for the week, the Compact Pickups and Mid-size Crossovers at -$103 each and a couple more at -$94 for the Compact Crossovers and -$95 for the Full-size Crossovers, we finished with eight of the fourteen truck segments at -.5% or more.
Last week we projected that current gas prices would be below year-ago levels. That became a reality as gas at the pump declined by $.02 week-over-week to $3.63 as compared to $3.65 in 2012. The price of diesel today stands at $3.91 per gallon, $.06 over the year-ago level. Even with the levels and change amounts we don’t see this as a driver in the vehicle changes levels we are seeing. The previous strength in the market just leaves more necessary changes to make room for the newer models, the 2014s. As we get closer to that new model year coming into the market we are seeing more and more 2013s appear in the wholesale market channels. This past week there were twenty models with their initial market-driven values published. The weekly change report will highlight these vehicles.
Another area of the market that warrants a closer look in the potential movement of values is that group of mostly older vehicles, those seven to twelve years old. These may not be front-line ready vehicles, but are important in the below prime and BHPH markets. One only has to look at the average age of vehicles on the road and also the mix of vehicles being traded in, especially within the franchised stores. The availability of some older vehicles could be referred to as the slow motion mirror image of the Cash for Clunkers program. Only this version is a slower movement reaction. We would like to hear your thoughts on these vehicle market values.