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Hello and welcome to this week’s edition of Beggs on the Used Car Market with used car valuation data trends from Black Book and Ricky Beggs. We trust the market has been good to each and every one of you as a buyer, a seller or a player in the lending side of the business. As I stood on the lanes this week I truly appreciate the comments that were made about the market strength, how some vehicles are identified and listed within the guides, and even the effects that actual VIN decoding plays within the identification and valuing of some units.
Where the market has been very active and strong overall, there was a $.02 jump this past week in gas at the pump prices, and no, that is not a significant change, but we are now $.12 higher than we were the first week of March. We are also getting real close to reaching year ago levels. There is nothing to be overly alarmed about in the movement as it is just part of the seasonal increase as the refineries change from winter blend to summer blend.
Looking at the actual market values, the adjustments we have made this past week and the comments from the dealers and Black Book survey personnel, the market can still be termed a sellers’ market, while in many locations, the bidders hands just didn’t stay in the air. Signs of some slight hesitancy to bid it on up are a little more prevalent. If there is any piece of the market that has already lost a little luster it is the under $3000 wholesale piece. That portion of the tax season, BHPH unit market seems to have already passed.
The remainder of the market is still holding strong overall. Even though the percentage of the overall adjustments being increases fell from the record highs, and was the lowest in the past four weeks, the 62% level of increases still represents a very strong market. This is very much in line with comments such as “good but not as strong as last month” from the Texas market to go along with “steady again” out of Illinois and the “still high” all the way from Washington state.
I think there are two factors holding the strength of the values up. One is that several dealers report that “retail inventory is low”. The other primary factor might be now that winter weather has finally left us, dealers are anticipating an uptick in traffic within the used market, and they must have some additional inventory.
Let’s take a look at some actual results from this past week. The average car segment change increased again, now for the third straight week at +$9. This past week seven of the ten car segments were positive week over week with the Upper Mid-size Cars at +$74 leading the way. The Prestige Level Cars at -$149 was the largest drop in value of the past five weeks for that segment.
Trucks continue to pull strong interest coming in at a +$31 average segment change. This is the first time I can recall that all fourteen truck segments were increasing week over week. Of the more volume segments the Full-size Pickups continue to be strong at +$50 this past week, along with the Compact SUVs at +$80. Even the Minivan Wagon segment at +$45, is positive for five consecutive weeks now.
When looking at year ago periods for both the cars and the trucks I am not the least bit surprised to see how much stronger we are today than a year ago where the trucks finished at +$5 and the cars only had four positive changing segments, and overall were at -$14, as these past four to five weeks this year have been amazingly strong.
Looking a little further ahead, we are only a couple of weeks away from the annual lineup change within the printed guides. That also means there are more and more 2014 models getting market driven values within the data, online tools and mobile solutions products. This past week right at two dozen models got their first market driven used values.
It may be spring break for many schoolchildren, but the market and industry meetings kept all of us at Black Book extremely busy. The insight and additional business were both impressive.