Black Book: Wholesale Market Conditions Wearing on Dealers
GAINESVILLE, Ga. — If dealer commentary gathered by Black Book's auction field team and survey personnel are a strong indication, lot management is becoming pretty worn down about tight wholesale volumes and rising market prices.
Black Book managing editor Ricky Beggs indicated during the latest "Beggs on the Used Car Market" report that two instances in particular struck him most.
"Dealers were trying to determine when the prices will drop. I read this as prices are stronger than dealers expected them to be, and that the trend can't be for the values to keep climbing forever," Beggs recounted.
"The second was along the lines of ‘I guess buying at a higher price is better than not getting any inventory.' If inventory is moving on the retail lot, you have to find a replacement as you can't sell from an empty lot," Beggs continued.
After reviewing what Black Book staff gathered, Beggs had the opportunity to meet with a group of fleet-minded dealers firsthand. Again, Beggs found weariness about how the wholesale market is behaving this year.
"A couple of dealers commented to me that it was good to see the Black Book guys and then tongue in cheek added, ‘You are the guys making cars bring so much,'" Beggs recollected.
"As our conversation continued, they commented further on the lack of available units driving the continued strength. They also wondered how high the values can go," he went on to say.
The most-recent Black Book data continued to demonstrate how values continue to be on an upward track.
Beggs shared that prices in 10 of the 12 car segments crept up last week, with all cars moving higher by a total of $6. He pointed out that this marks five consecutive weeks of growth in the overall car segment.
Elsewhere, Beggs noted that trucks also continued the pattern with now these units posting nine straight weeks of positive movement. He said trucks had an overall average change of $30 with 11 of the 14 segment types increasing.
All told, Beggs revealed that more than 7,700 vehicles changed for the week with 77 percent of the adjustments being increases in values. He added that the overall increase was about $56.
Compared to the previous week, Beggs found that the negative changes were not as great, a decrease of $138 compared with $170. At the same time, he spotted smaller increases than the previous week with rises of $113 compared to $130.
Black Book also discussed a year-over-year comparison of the average wholesale reported price of all 1- to 7-year-old models. The company determined that the average price has climbed for both the car and truck segments.
"With today's average price of cars at $15,967, we are at a 12-percent premium from the same time period in 2009, and trucks are up 14.4 percent for the year at today's average price of $14,510," Beggs explained.
Black Book also delved deeper last week into accessing lane activity in the heavy-duty truck segment.
"The interest in the lanes continues to be focused on finding the right pieces for the retail lots," Beggs pointed out.
"The limited supply of these right units continues to push the values being bid even higher, almost across the board," he continued.
Black Book also mentioned a reminder for its print subscribers. The company said its next guide dated April 26 would include lineups for used 2010 models.
"Many will include market driven prices with even more to be filled in as the 2010s show up in the wholesale auction arena," Beggs concluded.