Beggs: Auction Lane Action Begins to Cool
The hottest part of the spring market might be over because Black Book is seeing action cooling a bit in the auction lanes.
Black Book managing editor Ricky Beggs indicated in his weekly wholesale commentary that editors and other auction reports are confirming that condition.
“Spring break has come and gone in most parts of the country, and instead of an increase in activity at the auctions, things seemed to have slowed down just a bit,” Beggs explained in his online blog, “Beggs on the Used Car Market.”
He continued with, “The demand from multiple buyers pushing for an extra bid or two has disappeared in many cases. Reports were mostly made up of comments like ‘small cars in demand, low mileage economy models are up, SUVs slightly off and trucks not slowing.’”
After completing the analysis of all of its data, Black Book determined the overall average car price ticked down $2 last week, halting a streak of five weeks in a row of increases. The past two week, half of the 10 car segments jumped in price.
While the overall car price softened a bit, compact cars prices remained strong as Black Book found the segment jumped $27 or 0.4 percent last week.
That trend was not the case for premium luxury cars as editors watched the prices drop $48 or 0.2 percent.
Like cars, the overall price movement for trucks represented a decrease. Black Book said truck prices settled $11 lower, signaling the first decline in six weeks.
“With only five individual segments increasing within the trucks, this was the smallest number as at least eight segments increased each week over the past five weeks,” Beggs recapped.
A trio of truck segments constituted the extreme price movements as Black Book reported that compact SUV prices increased $39 or 0.4 percent. Meanwhile, luxury SUV prices dropped $88 or 0.3 percent and full-size crossover prices slid $82 or 0.4 percent.
In other data from a week ago, Black Book registered fewer necessary changes, averaging 1,487 price adjustments per day. Editors average 2,041 adjustments per day during the previous four weeks.
“Within all the changes we made it back to the 60-percent level of increases that we have had for four of the previous five weeks,” Beggs shared.
In addition to tracking and reporting the used market, Beggs mentioned the Black Book team spent some time this past week getting an “up close, detailed presentation on two new models.”
Beggs noted the two new models editors learned about from Ford are part of the offerings the automaker is rolling out to meet increasing CAFE requirements of 35.5 miles per gallon by 2015.
Black Book started by reviewing the latest technology behind the new 2012 Ford Focus Electric, five-passenger four-door hatchback.
“This vehicle leads the electric car segment with an equivalent of 105 MPG and a very adequate total electric driving range,” Beggs surmised. “With regenerative braking there were times during our test drives that the range of mileage on the very informative instrument panel actually remained the same or increased.
“Upon first visual look, only the plug-in door, unique front grille and some external electric badging would keep you from thinking this was not the traditional Focus,” Beggs continued. “After driving the car, the handling, performance, braking, comfort and solid feel all say that this ‘is a real car.’ Sure hybrids and electrics are currently only a minimal percentage of the total cars being sold in the US, but with the technology within this latest player in the electric segment, this car can only add to the confidence of potential owners.”
During Black Book’s second day in the Los Angeles area that included rain and wind, editors had the opportunity to drive the totally redesigned Ford Escape Compact.
“In order to stay competitive in any market segment, updates and redesigns are the key,” Beggs emphasized. “The changes made to both the exterior and interior meet and even exceed these current needs. Not only did the Escape receive visual changes, but the drivetrain and suspension upgrades provide impressive performance, solid handling and strong fuel economy levels. 2013 models will not have an optional hybrid configuration that has been a part of Escape line since the 2005 models. The impressive 1.6L and 2.0L Ecoboost engines provide even better fuel economy.
“With trim level designation changing to the car format of S, SE, SEL and Titanium, all trim levels except the entry level S models will be visually badged, greatly assisting the used market buyers as to proper trim level and value,” he went on to say.
Beggs wrapped up his latest commentary with a note for Black Book’s lender or lessor customers.
“The Black Book residual value projections for these and other new 2013 models will soon be published,” Beggs pledged.
“Give us a call at (800) 554-1026 on how you can receive these vehicle value projections,” he instructed.
“We hope you have a great week and we hope to see you on the auction lanes,” Beggs concluded.
Beggs’ video can be viewed below.