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Hello and welcome to this week’s edition of Beggs on the Used Car Market. I’m Ricky Beggs, Editorial Director at Black Book. We have completed the final full week of auction and market activity for 2013 as the final two weeks on the calendar will not carry any consistency of sale dates or wholesale focus.
This past week brought us a period of time with the number of adjustments higher than expected, but not a level of volatile value changes overall. Even with all the comments within the auction reports about the level of interest in the pickups, the average segment change for the trucks, vans and utilities stayed right in line as the previous week at -$59, or -.42%. The cars average segment change improved to -$40, or -.26%, the second smallest declining amount since the week ending July 12, 2013 at a -$35 level. The car change level is slightly better than year ago levels as well. Within the cars, the +$3 for the Entry Mid-size Cars was the first weekly positive segment change in over three months. Another first for the past three months is that not a single segment change within the car segments was at a level of -$100 or more.
Looking more in-depth at the truck changes, Black Book believes there is more consistency within the level of change by segment type. The trucks also had a positive moving segment with the Compact SUVs at +$24 for the week. If you were to eliminate the increase on the Compact SUVs, and also eliminate the other extreme change, the Full-size Crossovers which finished at -$185, then the spread variance within the trucks segments of -$38 on the Mid-size Pickups to the -$83 on the Mid-size Crossovers, you will find the closest spread range since back in the summer months.
With the trucks trending steady week over week, and the cars having a smaller average segment change this past week, we were a little surprised at the volume of changes for the cars as compared to the trucks. The cars were more stable in necessary changes averaging only 585 per day. While the trucks average segment change was more stable week over week, the number of changes was 2.6 times greater for the trucks at 1528 per day. This might support the number of comments about the activity in the trucks.
The price of gas at the pump on a national average dropped by $.03 for the week to where we are just $.01 below year ago levels at $3.24 per gallon this year. There are still wide ranges of what is actually being paid as during my travels this week I saw over $3.50 per gallon in Maryland, and paid only $2.95 while returning from an auction in South Carolina, to the $3.11 per gallon in my home town in northeast Georgia. So like the vehicle values, there are other variances that we deal with that could have an effect the market activity. And as the year comes to a close I think we have already reached the low price for gas for calendar year 2013 which was $3.19 for the week of November 11, 2013.
As we mentioned earlier, the auction activity will be all over the board these next two weeks due to the holidays. But for sure, the retail market will be turning some inventory thus creating an increased need at the first of the year for almost every dealer to head back into the wholesale marketplace.