Beggs: Stores Turning More Units Push Dealers Back to the Lanes
As fuel costs continued to rise to a level not seen in more than four months, Black Book noticed the combination of the holiday weekend sales performance and lenders opening the purse strings resulted in action heating up in the auction lanes this past week.
In his latest wholesale market analysis, Black Book’s Ricky Beggs said that as last week progressed, “there must have been some freshly created spots on the lot to fill as the auction activity was brisk.
“Sure, there were still a fair number of no-sales, but business was still taking place in the auction lanes,” the managing editor continued on in his latest update to his online video blog, “Beggs on the Used Car Market.”
Beggs went on to mention that “as the lenders continue to be more active and aggressive in their retail lending — from prime to subprime and even to BHPH and leasing — and in relation to more lenders offering programs and in-market penetration, it’s all making a steady comeback helping to support new-car sales and we are now having more trade-ins showing up in the wholesale market.”
Black Book editors adjusted prices for more than 2,100 vehicles each day during the past week. With these changes, there were also 10 models consisting of 61 units of various trims and configurations that were published with their first market-driven values.
“From all the data we analyzed during the week, the effects of continuing climbing gas and diesel prices at the pump — that has now reached a point that is higher than any time since back in the week of April 23 — has given us some surprising changes within the market,” Beggs surmised.
Overall, car prices dropped on average of $66 or 0.42 percent last week. Beggs pointed out that despite rising gas prices, entry level cars sustained the largest percentage price decline of all 10 car segments at 1.17 percent, followed by entry midsize cars at 0.64 percent.
In terms of dollar changes, Black Book determined prices for prestige luxury cars continued to adjust downward the most for the fourth consecutive week, dropping a week ago by $135.
The overall price drop for the 14 truck segments wasn't quite as much last week as it was during the prior week. Black Book pinpointed it at $48 after truck prices softened $53 going into Labor Day weekend.
“With all 14 segments declining for the week, the retention was still better than the previous week as nine segments had smaller declines,” Beggs explained as prices for midsize pickups dipped only $6, while passenger minivans dropped $22, and compact pickups decreased by $23.
Among trucks, the largest price decliners were luxury SUVs (down $106), full-size passenger vans (down $84) and full-size SUVs (down $70).
Beggs closed his latest update by reiterating how Black Book gathers its information and insights.
“Each week, Black Book has representatives at 62 physical auction locations. We take this data, along with thousands of additional records received electronically, to report the market as it changes,” Beggs explained.
“Under circumstances in past years, as gas prices increased, the more fuel-efficient car and truck models would have increased in value as the price at the pump would go up, while the less fuel efficient trucks would have been the larger declining models,” he continued. “So without analyzing the actual auction data, and reporting the market as it happens, the perception and ultimate changes would have been different than actually occurred these past few weeks.
“So with this increasing support within the market, we will be back on the auction lanes again this week in order to accurately report the market on a daily basis,” Beggs pledged. “We look forward to seeing you there. Have a great week.”
Beggs’ video can be viewed below.