Beggs: Black Book Sets Record for Weekly Wholesale Price Changes
Never before has Black Book made this many adjustments in a single week. And the majority of these adjustments were for prices needing to be higher.
Black Book managing editor Ricky Beggs indicated that he and his colleagues made more than 22,000 price adjustments last week as the demand for clean vehicles brought in more than 3,000 adjustments for clean versus average condition.
As Black Book looked at the results of market studies for this past week, editors also discovered they had the highest percentage of adjustments that were increases at 74 percent. It was the highest level recorded since Black Book has been tracking these criteria.
“The demand for good, clean cars was even stronger as the clean condition values stood out even more so, as 78 percent of clean changes were increases to the published values,” Beggs surmised during his weekly video report “Beggs on the Used Car Market.”
“As the editors and Black Book survey personnel attended the auctions this past week, many noticed a full dealer parking lot when they arrived,” Beggs continued. “The need for used vehicles is strong and the auctions are a great source to hopefully find the right vehicles.
“The challenge is competing with your fellow dealers for the limited supply,” he went on to say. “Several comments from our survey personnel reflected that dealers ‘were anxious to buy, especially good condition vehicles and also that the ‘bidding was strong with many concerned about getting the cars they need.’”
With that sentiment as a backdrop, Black Book discovered the overall trending in the car segments continues to be consistent during the past three weeks.
Last week’s trend finished with an overall gain of $61, as nine of the 10 car segments increased.
Beggs pointed out three segments in particular advanced by $100 or more. That cluster included entry midsize cars (up $117), compact cars (up $104) and near luxury cars (up $101).
Black Book also noticed entry level cars just missed the $100-increase level, coming in at $98 higher for the week.
“Three of the four are comprised of mostly more fuel-sipping models — not surprising as the price of gas climbed up again this past week,” Beggs mentioned.
“The truck and SUV segments get plenty of comments and almost in a questioning manner as to their continued interest and price strength. The overall change in the truck segments continued for a fourth consecutive week of trending above the $0 baseline,” he went on to say.
Specifically, Black Book determined this was the fourth week in a row where eight of the 14 truck and SUV segments increased week-over-week.
However, Beggs indicated three segments with slightly weaker market trending have been slightly soft for the past eight weeks as full-size cargo vans, full-size passenger vans and not so fuel-efficient midsize SUVs continue trending downward.
Black Book noted full-size SUVs led the segment types in softer values. Every week since the week ending Jan. 28, editors have seen this segment’s values decline and this past week was no different as the segment dropped by $76.
“All of these four declining segments are truck based platforms and generally less fuel efficient,” Beggs pointed out.
“Five of the eight increasing segments were crossover utilities and minivans, vehicles with varied functionality and perceived as more fuel efficient and versatile vehicles,” he went on to say.
Black Book also mentioned its editors added the initial market driven used values on 67 models, mostly 2011 units.
“If you access the Black Book products electronically with a mobile solution, your desktop Internet suite product or data files, then you now have these latest values for the 2011s,” Beggs explained.
“For the printed guides, the lineups with the 2011s will be in the Weekly Guide on April 25 and then in the May Monthly and Truck & Van Guides,” he said.
In wrapping up his report, Beggs shared some stories about his recent travels.
“I again had the opportunity to talk and visit with a few dealers this past week. It was great to see the level of lot traffic and business being done. The focus on finding used vehicle inventory continues to expand to every possible source from physical auctions, online venues, trade-ins, the service lanes, as well as consumer listings on Craigslist and eBay,” Beggs commented.
“The bottom line is the limited supply of used vehicles will be tight for at least another year and a half to two years until the recent lease contracts come full term and new-cars sales levels top the 15-million level, which probably won’t happen until 2013,” he conceded.
“Until then you can count on seeing Black Book on the auction lanes and watching online auctions, as we report the latest market values in a timely manner with fresh daily updates. Have a great week,” Beggs concluded.
More of Beggs’ reports can be found here.