GAINESVILLE, Ga. -

When Ricky Beggs and the rest of the team at Black Book looked to recap wholesale market activity from the past week, one element jumped out quickly.

In beginning his latest installment of “Beggs on the Used Car Market,” he shared, “As the survey reports and summaries arrived at the editorial offices, there was a consistent pattern of comments regarding one segment of the market. Four cylinder and fuel efficient cars are ‘a hot item,’ while more times than not, the reports included a comment that ‘the market is still strong.’

“With all the attention on the current level and steadily moving gas prices, we are faced with another 5-cent week-over-week change to a national average of $3.92,” Beggs continued. “Over the past two months we have had an average increase of 6 cents per week. This has had a consistent and positive effect on four of the car segments.”

Black Book relayed that prices for compact cars and entry-level cars have climbed for the past seven consecutive weeks, while prices for entry midsize cars and upper midsize cars have increased in value for the past five weeks.

“With gas prices obviously being a push for the fuel-efficient models, some would initially think the opposite would be happening with the trucks and utility models,” Beggs suggested.

However, Black Book’s data revealed just the opposite. For the past two weeks, 10 of 14 truck related segments have seen price increases week over week. And then both three and four weeks ago, price for nine of the 14 segments moved higher.

“It’s obvious there is a stronger need for the trucks than the drag of the gas prices holding them back,” Beggs emphasized.

“There are seven truck related segments with four consecutive weeks of increasing values, including utility vehicles, minivans, and midsize pickups full-size pickups have increased for the past three weeks,” he continued.

As the data arrived and editors completed their daily analysis, Black Book found the number of necessary adjustments was the smallest of the past month.

Overall, editors noted last week was the second consecutive week of more than 70 percent of the price adjustments being increases. 

In fact, Black Book noted the level of price adjustments being increases each of the last four weeks has been higher than 66 percent.

“With the movement in the market we have been dealing with over the past several months, having the most current market driven values to help determine how to buy, sell, or finance is of utmost importance,” Beggs stressed.

“That’s why the editors regularly attend a physical auction at least once a week while also watching numerous auctions online throughout the week to get a timely hands-on feel,” he continued. “And every day throughout the week we adjust vehicle values based on the auction data. Maybe the next late-model vehicle you need to put a trade value on or some 2012 model appears at the auction that catches your eye will have a market driven value.” 

To support its services, Black Book posted initial values based on auction activity of more than 25 additional 2012 models this past week.

“The market is just as hot and exciting as the Final Four will be on Monday night,” Beggs surmised. 

“With our market values, your odds are better than having selected the correct Final four bracket picks throughout March Madness,” he went on to say. “Have a great week and we’ll be looking for you on the auction lanes this week.”

Beggs’ video can be viewed below.

 

Black Book’s Specialty Market Analysis

With Sunday marking the first day of April, Black Book is venturing into what it calls the busiest season for the specialty markets.

In another video blog entry, Beggs began his commentary with a story.

“I recently had a customer while visiting our office ask me what was my favorite market to work with,” Beggs recounted. “What a tough question as they are all exciting, interesting, and fresh every day. 

“For years all my time was spent on the traditional car and truck markets,” he continued. “Now while working hand in hand with the editors of all markets, they each hold a spot with memories of various market issues. But much of the specialty market is not only about providing data and tools to help your business succeed within the medium and heavy duty trucks and RV markets, but also about the personal use and excitement related to a collectible car, or the thrill of riding a bike through the hilly curves of north Georgia or western North Carolina.

“It’s exciting to have worked with Eric Lawrence as we created the RV Guide from the ground up and now getting to physically attend some RV shows and auctions to fine tune the product and data,” Beggs went on to say. “Thinking back to when we started the Medium and Heavy Duty Truck Guide with the initial publication being released in November 2001, right in the midst of the major automotive market adjustment during the times Americans of all walks dealt with the terrorist activity in our country. So they are all exciting, but helping the industry within the specialty markets has a personal relationship for me.”

Motorcycles and Powersports

Black Book contends the Motorcycle and Powersports market is showing substantial positive gains in value for nearly all segments this month as the spring selling season gets under way.

“In much the same way as the unusually mild winter decimated snowmobile sales in most areas of the country, the early arrival of spring in many areas has led to the strong rise in values we are currently seeing at the auctions,” Beggs indicated.

Editors calculated prices for street, cruiser, scooter and ATV segments are up 2.5 to 3 percent. They also noted prices for off-road, on-off road, jet boat and watercraft segments moved 3 to 4 percent higher, while snowmobiles “not surprisingly” softened another 4 percent from last month’s values.

For the first time in a few years, Black Book discovered prices for slightly older bikes — three to seven years old — have outpaced gains in prices for one- to two-year-old models.

“They have recently been in demand by value conscious customers looking for nearly new bikes at used prices,” Beggs surmised.

“The lowered production volumes over the past three years, coupled with an apparently recovering economy, appear to be driving prices up at fairly significant rates for wholesale auction units,” he indicated.

“Another item to note is that we are still seeing quite a bit more variation in price from auction to auction, and region to region, than has been normal in the past,” Beggs added.

“It is always important to remember that our values are national averages and your individual market may vary somewhat from the book values,” he went on to say. “As the economy recovers, some areas of the country are clearly doing better than others, and adjusting for your local market conditions is more important than ever.”

CPI Collectible and Exotic Vehicles

Black Book admitted the turn of the calendar is important for this market segment.

“Spring is finally here, and we’re starting to see car shows pop up on the calendar and cruise nights start filling the streets and parking lots again after taking the winter off,” Beggs stressed.

“The winter auctions were very successful, and the February/March auctions continued the trends that we saw in Arizona,” he continued. “American classics from the mid-1950s to early 1960s are heating up, especially the high performance versions. The vintage European exotic market is on fire. Interest is also up on muscle cars, but prices have not really gone crazy yet.

“However, we are seeing a continued upward trend in custom cars, many of which are based on muscle cars,” he went on to say. Pickup trucks, from the immediate post war models up to about 1972, are trending upwards as well.”

Before moving on, Beggs pointed out one other note about this specialty segment.

“I think that the strength in the stock market has collectors feeling a little bit better about making big-ticket luxury purchases,” he said. “As the economy continues to improve, interest in collectible cars will follow suit and they will continue to rise in both popularity and value.”

Recreational Vehicles

Black Book found prices recreational vehicle values continued their seasonal climb as evidenced by strong performances at the wholesale auctions by all types of units.

Editors noted motorhomes came in at an average of $41,659, up more than $2,500 or 6.5 percent from last month, which actually was $1,657 higher than the preceding month.

Black Book also mentioned prices for towables, including travel trailers, fifth wheels and camping trailers averaged $10,075, a jump of $120 or 1.2 percent from last month, building on a $198 increase to begin the year.

“Although the final numbers from March are still coming in, things look pretty strong in terms of units, bidders and sale prices,” Beggs shared. “History tells us that RV sales generally stay strong through April, so I expect upcoming selling prices at auction to reflect a continuation of the current trends.  

“Some industry observers have wondered what impact the increasing fuel costs would have on RV sales, and my opinion is that it will not be dramatic,” he projected. “We track light, medium, and heavy duty trucks very closely at Black Book, and have not detected any indications of downward movement yet, and those vehicles are typically much more reactive to fluctuations in fuel prices than RVs.

Medium and Heavy Duty Trucks and Commercial Trailers

Beginning with medium duty units, Black Book determined the steady price trend is continuing.

“For the past several months, this segment has been very stable, not moving much in either direction,” Beggs recollected.

“In the last monthly video, it was stated that some of the newer models had softened a bit, that trend also continues,” he continued. “We are also still seeing the older models maintaining a slight upward movement.”

With the price of gas and diesel still marching up across the country, Beggs pondered what the long-term effect will be at the auctions and retail lots on these trucks.

Beggs asked, “Will buyers spend a larger amount of money to invest in newer model trucks that get better fuel economy, or purchase a slightly older used truck that might not be as fuel efficient but still get the job done? Will this push the older model truck prices even higher at the auctions? 

He responded with, “No matter the movement in the market we will be on the auction lanes, reporting the movement by model and segment whichever direction the prices move, when it happens.”

Turning over to the heavy duty category, Black Book acknowledged that finding clean condition used heavy duty trucks is a “huge” challenge right now. 

“There are all kinds of theories as to where they are or why there are not many to be found,” Beggs conceded. “A percentage have been kept in service longer and have been held back from entering the used market, while corresponding new truck orders are being delayed by the customers because they want to see how quick some of the LNG and CNG options become readily available and what the net cost will be.

“Many of the new truck buyers I am referring to are in the position to hold on to their pre-emission 07s,” he shared. “Many want to further evaluate the best option on new trucks for their operations before making the next new truck order and purchase. The medium and heavy duty graphs pretty much show what used trucks have been doing, what they are doing now.”

At the Mid-America Truck Show this past month in Louisville, Ky., Black Book indicated there was a panel discussion titled, “The Natural Gas Boom.” Editors mentioned there were six panelists and all were “very impressive.”

Beggs stressed that when, “You have T. Boone Pickens investing millions of his personal money and Jimmy Haslam, CEO and president of Pilot Flying J Travel Centers, telling 700-plus people that his company will have 100 Natural gas refueling locations by the end of 2012 — now that’s a commitment.”

Beggs wrapped up his specialty market commentary by stating used commercial trailers — almost across the board at most configurations — have become a “hot” commodity. 

“It is all based on the simple understanding of supply and demand for used and the high cost of new due to material costs,” Beggs concluded.

Beggs’ specialty video can be viewed below.