Beggs Gives Recommendations of Where to Put Wholesale Money
The Final Four takes place this weekend in New Orleans, and Ricky Beggs hopes his short-term wholesale price forecast is more accurate than his tournament bracket.
During the latest installment of his video blog, “Beggs on the Used Car Market,” Beggs asked, “Where would I put my money?”
In response, the Black Book managing editor stated, “The trend of the compact cars, entry level cars and entry midsize cars should continue to be in demand. With positive changes of up to six weeks on these three segments, I don’t see any reason for this pattern to change right now.
“On the truck side, there is also no sign at the current gas price levels, the tight used supply and the flexible functionality of trucks and utilities where a trending pattern contrary to the current one will have values backing up,” he continued. “This won’t continue all year as these have to depreciate at some point.
“We will be on the lanes and signing into the airwaves to view online broadcasted auctions in order to report the market based from the data and views of an independent source,” Beggs went on to say. “Our market reporting is sure to be more accurate than our March Madness brackets.”
Beyond college basketball, Beggs thinks all of that pollen that might be coating vehicles now that spring is in full swing might be code for what the unit’s true value could be.
“It’s been another positive week for all of us at Black Book,” Beggs acknowledged.
“As we attended the auctions, we found strong attendance to reflect the excellent conversion rates,” he continued. “For the full week, the bidding and buying supported increasing values for both car and truck segments.
“For those of you in the southeastern part of the country, there were also record counts for pollen in the air,” Beggs went on to say. “The lot guys at the dealerships are being kept very busy trying to let the true vehicle colors shine through. Maybe the impression is with all the yellow pollen, the cars seemed like they are actually coated in a layer of gold.”
Switching away from potential allergens, Black Book turned its attention to another topic some dealers also might find irritating — fuel prices. Editors mentioned gas costs continued their steady climb as prices at the pump ticked 4 cents higher on average last week to settle at a nationwide mean of $3.87 per gallon.
“The effects have been positive for 60 percent of the car segment types,” Beggs surmised. “On the other hand, the trucks overall have not been adversely affected.
“This is definitely a question mark as I have had conversations with at least a half dozen people within the industry from fleet, to lenders, auction personnel, commercial remarketers, dealers and even an automotive writer as well, as to what effect the price of gas was having on the trucks,” he added.
Wholesale prices mirrored the behavior seen at the gas pump. Black Book indicated the strength of the overall market continues to be “impressive” as the percent of adjustments being increased remained above the 65-percent level for the third consecutive week.
“This week when looking at clean and average condition adjustments, the amount climbed to 72 percent based on the second most vehicles adjusted on a daily basis over the past 10 weeks,” Beggs relayed.
Over the past four weeks of overall dollar increases, Black Book determined the average change amount continued to climb. The overall wholesale price climb of $61 was the highest since April 8 of last year when the overall uptick came in at $66.
Looking strictly at cars, Black Book said the average change was an increase of $28 as six of the 10 car segments moved higher.
For the fourth week in a row, compact cars paced the price jumps as the units moved up by $148. Other segments posting healthy price gains included entry midsize cars (up $123) and entry level cars (up $81).
However, two car segments softened again as they have for the past few weeks. Those two segments were premium sporty cars (down $76) and prestige luxury cars (down $35).
“Again, more luxury focused cars are trailing the pack,” Beggs pointed out.
“Another sign of the overall strength in the market is that at least half of the car segments have increased over each of the past 5 weeks,” he continued.
Looking over at trucks, Black Book found the overall price change came in at an uptick of $9 as the number of segments with positive changes has also gone up over each of the last three weeks.
This past week 10 of the 14 truck segment types increased, led by full-size crossovers (up $54) and full-size pickups (up $27).
In other wholesale notes, Black Book indicated it’s only about a month away from listings in the printed guides to include used 2012 models.
“These are already in the electronic tools offered by Black Book,” Beggs reiterated. “Even though not all 2012s will include a market driven value, many will. This past week another 17 2012 models will have published used values.
“Those with first time values can be identified in the Weekly Adjustment Report that is part of any Internet suite product from Black Book,” he added.
Beggs’ video can be viewed below.