When Will It End? Used-Car Values Gain in Value Yet Again

All 10 used-car segments gained in value for the second time in the past three weeks, although many are wondering when the gains will end, according to a July 13, 2009 report. Overall, the car segment average was in positive territory for the sixth week in a row. Many used-car customers are surprised at the level of pricing on some of the late-model used vehicles, “but they continue to bid because you must have inventory in stock to meet the retail customers’ needs,” said Ricky Beggs, managing editor of Black Book, in his weekly video report.

The used-truck segment also increased in value for the eighth consecutive week, with full-size vans and full-size wagons coming in as the only individual segments not seeing positive adjustments. Those two segments dropped by an average of minus $29. Full-size pickups and compact SUVs increased $115 and $105, respectively.

Referencing 2007 models, Beggs wrote that 16 percent, or eight of the 50 models tracked, have risen in value during the past year. These eight models increased in value from $400 to $2,100, averaging $1,203 appreciation, Beggs noted. He added that this is not a normal trend, because non-collectible vehicles are usually expected to depreciate in value over time.

Each month, Beggs said he tracks 50 popular vehicles for several different model years. He looks at the changes from one year ago, six months ago and compares these to today’s values. After acquiring this information, Black Book then forecasts how these models’ values will likely behave going forward one to two years down the road.

He noted that although this past year has been one of “great volatility,” the period from 2008 to 2009 has been better than the prior year for retention. He projected the next 12 and 24 months on all 50 models in the report to come in at negative $2,829 and minus 19.3 percent depreciation between now and July 2010, and another negative $1,831 and minus 15.5 percent depreciation for the next period ending July 2011 from July 2010.

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