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Hello and welcome to the final Beggs on the Used Car Market video blog for June and also for the first half of 2014, with data and insight from Ricky Beggs and Black Book. It is amazing how fast the days and weeks have been checked off the calendar. We have dealt with a spring market that was delayed, a spring market that extended into the middle of May, and an active new car sales market unaffected by record numbers of recalls. Finishing up the first half of the year we had “end of month” activity, where one Black Book survey person commented that it seemed there was “no urgency to buy or sell”. If there was one comment that appeared multiple times it related to the later model cars being a tougher sale. This is another indication that another model year will be upon us soon.
Gas prices continue to be the topic of conversations, not only in the auto related fields, but by almost all consumers. Even with all the projections of significantly rising prices, national pump prices have increased less than 2 cents this past week and only 3 cents over the past two weeks. At $3.70 per gallon we are now $.13 over year ago levels. There was at least one auction that seemed to be thinking about increasing gas prices as a comment was made that “gas fumes were on the buyers’ minds”.
Looking at the weekly changes within the car market only one segment seemed to actually support the gas fumes comment. Overall the cars weekly change of -$53 was very close to the same level of change each week during June. During the most positive adjusting weeks of the spring market in March and April the Entry Level Cars, the Compact Cars, the Entry Mid-size Cars and the Upper Mid-size Cars were the strongest increasing segments, made up the segments with the lowest average price and also are comprised of the more fuel efficient models. As the comments about volatility in gas prices are prominent, only the Entry Level Cars, of the previously mentioned four segments, adjusted better week over week. One year ago this segment also had the smallest weekly change. Apparently there are just more seats for these seats. After talking with several major players in the BHPH segment of the industry over the past few weeks, we find vehicles that fit in this Entry Level Cars segment are very popular selections.
The truck segments average change was at slightly higher levels this week at -$39 as compared to the -$34 the previous week. This was the largest weekly decline since the week ending February 21, 2014, just prior to the beginning of the spring market strength. Even though the trucks have declined less than the cars, we now have a declining truck market for six of the last seven weeks. And for the first time in more than three months we had a weekly market with no truck segments actually increasing.
After the smallest declining segment change of -$13 for the Compact Pickups and the major decline of -$104 for the Luxury SUVs this past week, the most consistent level of change within a segment during all four weeks of June has to be the Compact Crossovers at -$36 for the past two weeks and a four week average of -$39.
The main question that remains to be answered is how will the market react this week with the July 4th holiday? With the majority of auctions being held on Tuesday, Wednesday and Thursday every week, at least the majority of auction activity will run in a more normal mode. But will the buyers be thinking grilling out, pool parties or heading to the beaches and lakes? At least for part of the week, we will be on the lanes and analyzing the market data. Hopefully the retail activity around the holiday will be active and will bring a crowd back to the lanes the following week looking to aggressively fill many empty holes. Happy Birthday America!