Beggs Spots Strongest Proportion of Positive Value Changes in Six Months
In a week that showed steady sales across the assorted auction channels, the wholesale market saw a relatively light amount of value adjustments and the proportion of those changes that were increases was the strongest the market has seen in more than six months, according to Black Book managing editor Beggs.
There were 1,520 wholesale value adjustments each day last week, he noted in the latest “Beggs on the Used Car Market” video report. This reflected a rather stable wholesale market for the first week of business in 2012.
“As we completed a week of market study and making the necessary adjustments, it was obvious that most dealers and commercial accounts were on a similar path. The sales through the various auction channels were more stable than not, as the average number of vehicles being adjusted each day was 1,520 per day,” Beggs pointed out.
“This was a little less than almost every week since the end of July 2011. Another sign of the market being ready to do business was that 33 percent of the adjustments were increases, the largest level since the week ending June 24, 2011,” he added.
Breaking the wholesale changes down by segment, Beggs pointed out that although the values of all 10 car segments were down, the overall change for cars — a decrease of $33 — was the most moderate decline cars have shown in more than five months.
What’s more, the gap between the heaviest decliner and the lowest decliner was just $21, compared to the $123 gap the previous week.
“Another interesting pattern was that four segments had the smallest decline for at least the last 12 weeks. A couple of these segments, the prestige luxury cars at (negative) $51 and the premium sporty cars at (negative) $31 are typically the segments with the largest weekly change,” Beggs noted.
Moving over to the truck side of the market, the average change was negative adjustment of $21. This marked the second lightest value decrease since the week ending June 3, when values dipped $18.
The most moderate week in that seven-month time frame was the week before last, when values were off $11.
Two of the 14 truck segments showed an increase. The luxury SUV segment was up $6, and the compact pickup climbed for the fourth time in five weeks with an $11 hike.
The adjustment variance on the truck side was $134. However, if the full-size crossover’s $123 decrease was taken out of the equation, the variance is lowered to $40. While certainly heavy compared to the $21 variance on the car side of the market, Beggs said this spread is still “respectable.”
Moving along, Beggs also noted that Black Book brought 22 more vehicles into the fold as it rolled out the first market-driven used values for these models.
“I think this could be attributed to the flurry of new-car sales activity during December giving confidence that newer models are now getting more consumer interest, thus more moving through the wholesale channels,” he explained.
Beggs went on to turn his attention toward Saab, which Black Book is paying more attention to given the fact this automaker is likely on its way out.
Surprisingly, though, Beggs said he hasn’t noticed any real wholesale impact yet.
“The unfortunate demise of this manufacturer could bring about changes to the values. There is very limited wholesale activity to report,” he shared.
“I am a little surprised that we haven’t seen some yet to be titled new models being run through the wholesale channels. We are also watching as there have been some significant discounts on existing new models, which should have a direct effect on the later model used,” Beggs continued.
“As the traditional Saab owner is generally committed and happy with their current or past Saab, some may be looking at this situation as their last chance to buy a new one, helping hold used values,” he added.