Beggs: Dealers Replacing Holiday Sales; Wholesale Prices Remain Untouched by High Gas Rates
As dealers wrapped up what seems to be a successful Labor Day weekend for sales, Ricky Beggs, managing editor at Black Book, noted it may be time for some buyers to venture into the lanes to fill their lots back up after holding special holiday deals.
In this week’s edition of Beggs on the Used Car Market, the editor explained that the costs of these “replacement” vehicles may be “down slightly as the market continues to adjust to more used supply, as well as the fall market getting more prepared for those 2013s, many of which are showing major refreshes,” such as the new Ford Fusion.
And even though a few models are getting positive adjustments — 29 percent of the changes this past week are increases to the values — Beggs noted that “over all, the market is declining.
“There were no total segments with positive change levels even though the full-size crossovers only declined by $6, the compact SUVs by $5 and the compact pickups by $13,” Beggs further explained. “Due to the full-size vans and wagons declining by $122 and $132 respectively, and the luxury SUVs by $94, the average truck segment change was still at the $53 level, which is very close to the level of truck changes over the past three months.”
Though Black Book continues to look for any effects in the purchasing habits of the dealers that could be reflective of higher gas prices, Beggs said it seems the recent fuel-rate spike has yet to effect the lanes.
In fact, full-size pickups and the full-size SUVs, along with the mid-size pickups, all held better change amounts than the overall segment change level, Beggs shared.
Furthermore, the car segments are “giving us a larger declining level overall when compared to the trucks,” he explained.
The “major driver” behind the car segment decline is the prestige luxury car segment, down by $139 this past week, Black Book reported.
This marks the third consecutive week of over $100 decline for this segment type.
For changes within the smaller car segments, the entry level cars fell by 0.89 percent, followed by the 0.64 percent adjustment with the compact cars, “bucking the trend of increasing gas prices,” Beggs said.
Beggs continued along in his report noting there are a couple of areas in the lanes that dealers should keep an eye on in the coming weeks.
“One is the increasing number of dealer cars coming into the wholesale marketplace. In more specific insight, keep an eye open to seeing more five- to eight-year old vehicles pushing that 150,000-plus mileage threshold,” Beggs began.
“The trade-ins are getting older, and those aren’t the best franchised dealer inventory pieces. The one issue that was mentioned the most and by numerous of the Black Book survey personnel reports was in relation to the dislike and concern about the number of high mileage units and the lower interest by the buyers for these vehicles,” he continued.
Moreover, he also stressed dealers should also keep an eye on the one- and two-year-old off-rental units.
“With the 2013s appearing in more adequate volumes, the replacing of the rental inventories has officially begun,” he added.
“So whatever your market, there should be something in the wholesale arena to fill your inventory needs,” Beggs said, wrapping up his report.
To view Beggs's video, see here.