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Here is the latest used car market valuation report from Ricky Beggs and Black Book. The New Year is now in full swing. A non-SEC team has finally been named college football’s national champion. Now we are just a couple of weeks from the big party called the Super Bowl.
The playoffs leading to the super bowl of the used car market are taking place every day at the auctions and online wholesale offerings. Being the winning bidder, or successfully dealing for that next profitable trade-in, keeps you in the game. Heading into “tax season”, the “super bowl” of the BHPH and subprime business bring more interest into the five to ten year old vehicles. This year there is the added challenge of a very limited offering of the five to seven year old used cars in the market. Fortunately the supply of one to four year old models is steadily increasing for the overall used market, but not to the support of the BHPH business.
Looking at some of the Black Book analysis from this past week shows the beginnings of the expected value increases for tax season. There was an increase in the percentage of adjustments that were increases to just over 21%, the strongest level over the past five weeks.
The average segment change within the cars at -$58 is the first sign of an improving market. With seven of the ten segments having smaller declining levels than the prior week, the two mid-size car segments had the smallest change levels. With segment average prices between $7500 and $8900, these are attractively priced for the spring market. Only the Compact Cars and the Entry Level Cars are lower priced segments in the $5900 to $7000 range. The Entry Level Cars at -$60 this past week we feel might have been a temporary higher level of adjustment as the previous two weeks’ changes were single digit levels and year ago changes are near the lowest level of car changes. The Entry Level Cars are also more popular this time of the year.
There was very little change difference week over week within the trucks, coming in at-$55 overall. Full-size Passenger Vans and Compact SUVs both had increasing positive level changes for the week. The Compact Pickups had a good week as well with only a -$7 change. A couple of segments had much tougher weeks, the Luxury SUVs and the Full-size SUVs, with -$202 and -$190 changes respectively.
As we go back and look at various comments from the auction lanes, there were a couple that stood out. One was the pickups were getting attention and doing well. Already mentioned was the -$7 for the Compact Pickups, while the Full-size Pickups were less of a drop than the overall truck segment changes at -$53. The other was the reference to the number of no sales, along with references to sellers holding their floors. Often times we say selling the vehicle at its first offering will bring the best money. Leading into the improving strong spring market has to be the exception to our normal recommendations.
By the end of this week, several members of the Black Book team will be in New Orleans for the AFSA conference as well as the annual NADA Convention and Exposition. There are some exciting product announcements coming out of the Black Book booth. So, why not stop by booth #2731 and see for yourself.