Beggs: Distinct Car Price Movement Unfolds in Spring Market
Before delving into various segments of the specialty units, Black Book managing editor Ricky Beggs described what he called a “slightly delayed spring market.”
Black Book found that 55 percent of its adjustments this past week were increases as its analysts made a little more than 2,040 adjustments each day.
“Activity was great, and as usual, there were still a certain amount of no sales,” Beggs shared during this latest “Beggs on the Used Car Market” video report.
“With comments like ‘a red hot market’ and ‘a feeding frenzy on the lanes,’ the trend in values was no real surprise as we completed our analysis,” he continued.
Black Book discovered that cars showed tremendous wholesale interest as these units went from an overall price decline of $11 to a gain of $22 last week — a $33 swing. Analysts determined seven of the 10 car segment types went up in average value for the week.
Leading the car charge were entry-level cars (up $131) and entry mid-size cars (up $41).
Conversely, Black Book determined trucks fell by an average $29; a figure Beggs said was only a few dollars more than the previous two weeks. Declining the most were full-size pickups (down $65) and full-size SUVs (down $102).
“Most of the time, the wholesale market is driven by the results of recent retail activity and sales," Beggs explained.
“With the interest and talk on the lanes from the past two to two-and-a-half weeks continuing to be focused on more fuel-efficient cars,” he continued, “I was slightly taken back after talking with a few franchised and independent dealers who said their most recent retail sales — both new and used — were trucks, SUVs, and mid- and full-size cars with very little increased interest in higher MPG cars."
After discussing cars and trucks, Beggs moved on to motorcycles.
“We are at the start of the season for people to start thinking about getting their motorcycles out and riding again,” Beggs pointed out. “The 70th anniversary of Bike Week in Daytona is currently in full swing.”
Black Book learned at a recent dealer event the amount of store managers who are using its official Motorcycle & Powersports Value Guide to stay on top of current pricing trends. Analysts noted prices are currently increasing every week as the dealers are preparing for the appearance of warmer weather.
“As we continue to track the market, we expect prices to rise even more for the upcoming April edition,” Beggs insisted.
Beggs went on to mention 2- to 4-year-old bikes are showing extreme price strength while the 1-year-old versions are holding tight.
“At some point the consumer will realize that the new bike or barely used bike doesn’t cost that much more than the used 2- to 4-year old model,” Beggs shared before offering a specific example.
When looking at the auction wholesale values for the Harley-Davidson 1200 Sportster in the March guide, Beggs said there is only about a $390 difference between the 2007 to 2008 model and another $375 between the 2008 to 2009 model. He added that when looking at the slightly used 2010 model against the 2009 model, the spread increases to $900.
Moving on to another specialty segment, Black Book determined values of medium- and heavy-duty trucks and commercial trailers are following the trend and strength of the auto and powersports markets.
Analysts indicated very solid, good condition 2008 and 2009 Class 7 and 8 trucks and tractors are showing exceptional strength. Value adjustments trending upward by as much as $3,000 from the March published data have been spotted.
“The alternative to these strong values is waiting for a new model at a significantly higher expenditure,” Beggs interjected.
“The price of diesel fuel is climbing similarly to gas prices and is up 13 percent over the last 12 consecutive weeks,” he continued. “At the same time, freight tonnage continues to rise along with a better perceived economy. Demand to haul the extra freight continues to push the late-model values up.”
Black Book intended to be on hand at 47th annual National Truck Equipment Association Convention this week in Indianapolis.
“So when you see us there in the educational sessions or on the exhibit floor, let’s talk about how you see this specialty market,” Beggs requested.
Continuing on his discussion about other specialty segments, Beggs surmised that the specialty collector car market is firming up after some adjustment during the recent struggling economy.
“The most recent collector car auctions were strong and even though there were the exceptional transactions like the 1970 Plymouth HEMI ‘Cuda Convertible that brought $1.7 million. The majority of vehicles saw more modest increases,” Beggs offered.
Black Book also described the vintage exotic market as “hot” for at least the past year.
“For example, a very nice 1955 Mercedes 300SL Gullwing just sold in the $700,000 range, while just six or seven years ago, top dollar on these cars was around $320,000,” Beggs explained.
When looking at the popularity of custom cars, Black Book said the market value is really “in the eye of the beholder.”
“They are all unique in quality, engine enhancements, body work and even the quality of the paint job,” Beggs asserted.
Finally, Black Book mentioned that it’s planning an update next month on the RV market
“In the meantime if you are interested in a free test drive on the RV values give us a call for a login and password,” Beggs suggested.
To watch more of Beggs’ videos, visit this website.