Each month Ricky Beggs, vice president and managing editor of Black Book, the vehicle valuation guide, provides an analysis of trends in the used car market. This time around, he looks back further on the quarter and the year. It's a lot to digest, but great information for market watchers!
Whether you are a buyer or seller, franchised or independent, a financial institution or manufacturer, the interest in the past, current and future trends in the used market is on the top of the list of issues that affect your business and daily decisions. With only two months remaining in 2010, there are still plenty of opportunities within the used industry. With the overall trend in value retention in the past month representing a fall seasonal market, the question arises as whether this trend will continue or not and if so, at what point will we see a potential uptick in the market.
During the past month when looking at current three year old models, the majority, 15 of the 24 segment types tracked by Black Book, had depreciation levels for the month at or below the normal annual depreciation levels of 1.5 percent per month. This being a typical time when the market is slightly weaker in demand and value retention, the current trends are supported by a lower supply of vehicles in the marketplace than we are accustomed to. The average for all 24 segments for the past month was -1.47 percent or a monthly change of -$275.
When comparing the current trends of 2010 to those of a very strong 2009 market and a very volatile 2008, using respective three-year-old models, the trends for November 1st and the previous month resulted in -.51 percent (-$89) for 2009 and -3.22 percent (-$483) for calendar year November 2008.
Breaking the vehicles into a slightly different view, the trends by domestic cars, import cars, domestic trucks and import trucks, we see some very similar patterns for the past three years as we saw in the segment type comparisons. Domestic and import cars declined for the past month at -1.65 percent and -1.91 percent, respectively. In 2009 we actually reported an increase of .26 percent for domestic cars and a very solid -.42 percent for the import cars. For 2008 the changes were at -2.44 percent and -3.71 percent, respectively for domestic and import cars.
The truck trending is slightly better for 2010 at -1.03 percent for domestic trucks and a very similar -1.00 percent for the import trucks. I see this as an indication that the consumer in the United States still desires vehicles with carrying capabilities and versatile functionality.
One year ago for 2009, the domestic trucks were the weakest in retention for the month, but at a still respectable -1.07 percent. The import trucks declined only -.09 percent for the month. During 2008 the market was right in the middle of the gas price volatility and had retention value declining -2.69 percent and -2.57 percent for the domestic trucks and import trucks, respectively.