“Beggs on the Market” is a weekly video clip that Ricky Beggs, Black Book’s vice president and managing editor, posts every Monday morning:
Almost everyone I heard in the recent automotive conference presentations continues to be amazed at the recent trends in the used vehicle values as they are steadily increasing. Auction owners and managers are again reporting ultra-high conversion rates.
One commercial remarketer, while sitting in the airport late Thursday night after the CAR Conference, even mentioned values increasing as the sales were held and completed each day throughout last week. Almost everyone relates the changes to a tight supply of inventory and an active retail market with empty holes on the dealers’ lots.
Let’s take a more detailed look at the results from the Editors’ most recent analysis. The market continues to strengthen with 67% of the necessary adjustments being increases to the previous day’s published values. This is slightly stronger than the 66% increases of the week before. From these adjustments both the cars and the trucks had positive week-over-week average values, with the cars up by $6 to an average price of $13,942, and the trucks average price of $12,672 being up by $5 week-over-week.
The last time both cars and trucks increased within the same weekly reporting period was almost a full year ago for the week ending April 29, 2011. Not only were the values strong but the number of changes per day at 2,338 was more than 600 more per day than the previous week, and the most active in the past 10 weeks.
For the second consecutive week, seven of the 10 car segments increased. The three declining segments were the same ones for both of the past two weeks: the more luxury-type cars from the Prestige Luxury Cars (PLC), the Premium Sporty Cars (PSC) and the Luxury Level Cars (LLC).
The two segments with the largest increases were again the Compact Cars (SCC) up by $80 and the Entry Level Cars (ELC) up by $58.
Even with gas prices up at the pump again this week to a national average of $3.83 per gallon (as of March 19), the trucks continue to show strong demand and strength. The Full-size SUVs (FSU) and the Mid-size Crossovers (MXU) led the way as nine of the 14 truck segments increased for the second consecutive week. The Full-size Pickups (FPT) increased this past week by $3 after declining the week prior, while the Compact Pickups (CPT) declined this past week after being one of the nine segments that increased the previous week.
With all these positive adjustments, I can’t begin to tell you the number of times this past week that I was asked “how long will this strength continue?” Based on the supply in the pipeline, the level of retail sales and the gradually increasing consumer confidence, we feel pretty confident there is positive trending ahead of us. Only you the bidding and buying dealer will determine that for sure.
Watch the video to view Ricky Begg’s full segment on used car prices: