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Hello and welcome to this week’s edition of Beggs on the Used Car Market, with data and analysis from Ricky Beggs of Black Book.
Another month has passed and the overall movement this past week took pretty much the same direction as the previous four weeks. About the only difference is the level of declining amount continues to get larger week over week.
Looking at the ten car segments each week since the week ending July 4th, the overall average segment change has steadily increased from -$45 for the holiday week to a high point for the whole past year at -$86 this past week. At a -.51% change this past week, the four week average is at -.43%. This comes in at a total change of -1.7%, slightly over traditional pre-recession monthly change levels.
There are three segments that are trending softer than most in dollar levels. The Prestige Luxury Cars at -$183 this past week, have a four week average change of -$131 and lead the pack. The Premium Sporty Cars at -$184 this past week, the largest decline, have a four week average change of -$121. The third segment is the Luxury Level Cars at -$110 this past week and a four week average of -$87. The percentage change for this segment has averaged -.5% per week for the past four weeks. Think a -2% change for a month at this rate.
When looking at the overall percentage change, some of the smaller, less expensive and also more fuel efficient models are taking the lead in this form of change. All average at least a -.5% decline per week over the past month. The Compact Cars at -.5%, the Entry Mid-size Cars at -.56%, with the Upper Mid-size Cars with an even larger drop at -.61%, couldn’t touch the percentage change of the Entry Level Cars at -.8%.
The fourteen truck segments actually improved overall in the average change by segment this past week compared to the previous two weeks. At a four week average of -$49, this past week was only -$45.
There are five truck related segments with an average change of -$60 or more for the past four weeks and an interesting note is that with four of these five the most recent weekly change amount was the lowest declining level. Of the five only the Full-size Crossovers, with a four week average change of -$101, and -$98 this past week was not the lowest weekly change level of the past month.
Compared to some of the segment percentage changes of the cars the trucks look in much better shape with only the Compact Crossovers at -.48% and the Full-size Crossovers at -.47% even came close to the -.5% level with the overall trucks change of -.32%.
There is a lot of movement within the market in values as the Black Book Editors adjusted on average throughout the week 2222 vehicles per day. The last time the movement was that active was the week ending April 18, 2014. One year ago the number of adjustments stood at only 1624 per day. This past week the percentage of increasing adjustments was only 22% whereas the active week in April was a whopping 75%, and one year ago more similar to this past week with only 19% increasing.
Let’s don’t forget the gas prices. There is still no increasing demand being created for the hybrids, electrics and smaller more fuel efficient ICE models due to gas prices. Gas prices dropped by another $.05 this past week, and now stand $.11 below year ago prices. This is the lowest point since the week of March 10, but still a way to go to hit the low point for the past 52 weeks of $3.19 for the week of November 11, 2013.
Why the significant overall movement in vehicle values this past week and month? Part is the adjustments to get ready and create a space for a new model year of vehicles to come into the market. But while looking at all of the comments from the auction lanes and market reports and comparing those of this week to the prior week, we found a totally different tone. There were more upbeat comments of “steady, busy, and larger crowds” from two weeks ago to expressions of “a tough day, softer buyers and trying to make a correction” this past week. I then took a look at the July calendar and we just went through not only the last week of the month but the fifth week of the month. I wouldn’t be a bit surprised to see a better trend reappear this coming week.