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Hello and welcome to this week’s edition of Beggs on the Used Car Market from Black Book. And by springtime, not just because the calendar says we have reached that point in the year, but after talking with a couple of industry folks in Detroit, the DC area and even from two mid-west states, there was a freshness in their voices due to no snow in the air or on the ground, with some sunny skies bringing temps well above freezing levels, finally.
What a week it has been in relation to market values at almost every auction. The Black Book survey personnel in their summary reports almost all mentioned the amazing activity on the lanes, the very limited number of no sales, and the strength in the vehicle prices. A couple of the comments were very specific when they said the mid-size and smaller vehicles were extremely strong, while the demand for $10,000 vehicles is strong, with the availability way under demand. With the average age of the most of the trade-ins at franchised stores often fitting in the 2-4 years old and then climbing to the 8-11 years old, the missing 5-7 year old units are just in lower supply. Another comment, which might seem like an exaggeration, described the market as the prices being so high they were bringing retail.
Over the past week the number of changes each day averaged 1783 per day which was the second highest over the past month. During that monthly period as each week progressed, the percentage of adjustments that were increases steadily grew to almost 68% this past week, the highest level of any week over the past year.
Overall the cars had an average segment change of -$9, the lowest level of week over week change since almost a year ago for the week ending April 5, 2013, when there was less than a dollar decline. There were six of the 10 car segments with increasing values for the week, with three of them now having increases for four consecutive weeks.
The truck market was even more impressive finishing at +$15 overall, the most strength for any weekly period over the past year. With ten of the fourteen truck segments increasing for the week, the strongest individual segment was the +$51 for the Compact Crossovers, which are now on a three week run of increasing values.
An even more impressive indication of the continuing strength within the total market was that of the twenty-four total segments, only five were not as strong as the prior week change. Two of those that were not as strong, the Entry Mid-size Cars and the Upper Mid-size Cars, were still positive changes for the week.
The positive run in the strengthening market really covers the past month. During that time fourteen segments actually increased in value, led by the Entry Level Cars at +2.6%, while only one segment declined an above average amount, the Prestige Luxury Cars at -2.1%. With an overall market change for the month at -.3% that is only a $48 decline from an average market price of $18138.
Going back to a few of the comments from the lanes, some dealers think there might be another month of positive values before settling into a more stable market. You can count on Black Book to be on the lanes reporting the market, and one that will be hard to match the strength of this past week. Let’s head back to the auction lanes to find out for sure. Have a great week!