Beggs: Dealers More Interested in Fuel Efficiency as Gas Hits $3.72 Nationwide

Black Book collected dealer reaction from throughout the country as gas prices continued to climb, and it appears these rising costs are weighing on the minds of many in the business.

Managing editor Ricky Beggs indicated that the average price at the pump now stands at $3.72 after a seven-cent rise last week. Beggs pointed out the figure is 12 cents above the year-ago reading, but still below the record average of $4.11 set in 2008.

“It has been an interesting week in the used-vehicle market with a variety of views regarding the demand, or lack of it, for used inventory as well as various comments about the increasing gas prices,” Beggs began in the latest episode of his weekly online video analysis, “Beggs on the Used Car Market."

He continued by stating, “There were several survey summary reports with comments relating to the rising gas prices and the resulting effects on the market.

“Two of the three comments saying there was interest and demand for the more economical and higher miles per gallon vehicles, and they came from states with higher than the national average gas prices with some reaching the $4.20 level,” Beggs highlighted. “The third state with comments on economy level cars is at the $3.95 to $4 level.

“Interestingly, another report from an Indiana auction reported that gas prices have yet to have an effect on the trucks and utilities. Gas prices in most of Indiana are only a dime more than the national average,” he went on to say.

Beyond gas prices, Beggs shared another hot topic that seems to be on dealers’ minds nowadays.

“There is one other often-mentioned comment from the Black Book survey personnel, and that relates to the higher mileage levels on a significant number of units being run down the lanes,” Beggs noted.

“Part of the higher mileage is due to the older cars being offered,” he continued. “A report from Michigan even specifically mentioned the 10- to 15-year-old cars coming in. We have recently talked about the aging trade-ins and how they are not being kept for retail, but being distributed into the wholesale channels," he added.

Even though there continues to be a “solid” number of no sales, Black Book adjusted prices for an average of 2,546 vehicles per day a week ago — the highest amount in the past five weeks.

Taking a deeper look at the 10 car segments tracked by Black Book, prices declined on average by $63 last week, an amount a little more than the average of the past four weeks, which was $57.

A year ago, editors mentioned, cars dropped by an average of $39 as no segment moved higher.

Last week’s leading car prices decliners — prestige luxury cars (down $145) and luxury level cars (down $77) — are “reflective of what we have been reporting that luxury vehicles are expected to have larger declines during the fall market,” according to Beggs.

Even with gas increasing, Black Book explained that more fuel-efficient segments continue to have larger percentage declining levels, led by entry midsize cars (down 1 percent), entry level cars (down 0.75 percent) compact cars (down 0.71percent) and upper midsize cars (down 0.68 percent).

The percentage change of all cars came in as a dip of 0.47 percent.

Looking over at the 14 truck segments, editors found prices slipped by $44 or 0.36 percent, a level Black Book said was right in line with the most recent four-week average and just $4 more than the change a year ago.

Although there were no truck segments increasing for the week, Black Book found prices for compact pickup trucks fared the best at a minimal decrease of $6.

Editors noticed prices luxury SUVs declined the most for the fifth consecutive week, dropping by $78 last week. Interestingly, one year ago luxury SUVs were the leading declining truck segment, too, tumbling by $124.

Beggs wrapped up his latest analysis by touching on festivities going on this week throughout auction sites.

“As Black Book reports the market on a daily basis, the foundation of the data to support the values we publish comes from the industry’s most realistic and truest wholesale market, the auctions of the National Auto Auction Association,” Beggs emphasized.

“This week we are celebrating National Auction Week. Since 1955 when Black Book was established, we have been reporting and supporting the market and the auctions,” he continued. "Our congratulations go out to the NAAA and this year’s president, Charlotte Pyle.

“We appreciate all of the NAAA member auctions and their general managers and staffs for their contributions to the used market industry,” Beggs went on to say. “We look forward to seeing you again this week on the auction lanes.”

Beggs’ video can be viewed below.

Used Chevrolet Corvettes See Biggest Price Drop on Cars.com

According to the site blog, “Kicking Tires,” written by Mike Hanley, Cars.com determined that prices for late-model used vehicle continued their decline in August, dropping nearly $200 on average, or almost 1 percent, from a month earlier.

Hanley noted used Chevrolet Corvettes saw the biggest declines, dropping on average 6 percent from July 1 to Aug. 1.

The site discovered the average asking price for the Corvette was $55,608 on Aug. 1 — about $3,700 less than a month earlier.

Cars.com acknowledged used-vehicle prices have fallen during the last two months but remain higher than at the beginning of year.

According to the site, as of Aug. 1, the average price stood at $22,177 for cars from the 2009 to 2011 model years, or $381 more than on Jan. 1.

The chart below details the top 10 used models from the 2009 to 2011 model years with the biggest price drops, as well as the 10 with the biggest increases.

To be eligible for the list, a model must have at least 500 units in Cars.com’s national inventory.

 The original blog post can be found here.