GAINESVILLE, Ga. -

Along with his monthly look at the specialty market, Black Book’s Ricky Beggs dove into a subject high on the minds of dealers and consumers alike — gas prices.

Trying to get a handle on what fuel prices could do to the wholesale market was among the many subjects Black Book’s editors grappled with last week.

First, however, Beggs used his latest edition of his video blog, “Beggs on the Used Car Market,” to recap what prices movements unfolded a week ago.

Beggs indicated the daily market study and adjustments resulted in the most positive overall changes in the market since the week ending May 20. He mentioned that was the end of a 12-week period where 10 of the 12 weeks contained more increases than declines.

“There were numerous reports from the auctions over the past couple of weeks with resulting ultra-strong conversion percentages,” Beggs shared. 

“The tight supply continues to be a driver, and the need for additional fresh inventory for the retail lots pushed us to report 53 percent of all adjustments being increases to the previously published values,” he continued.

Black Book discovered that leading the way for these increases was a pattern shift in the market.

Editors determined five of the 10 car segments increased in value this past week. Those segments included compact cars (up $28), entry level cars and entry sporty cars (both up $14), as well as upper midsize cars (up $7) and entry midsize cars (up $6).

Beggs also pointed out full-size cars almost made a positive change, too, but they declined by only $1.

All told, the average car segment change came in to be a decline of $11 — the smallest car drop since a $3 downtick last June 24.

Black Book acknowledged trucks brought its editors toward a different trending pattern than cars, as only one segment posted a price increase for the week. Compact SUVs went up by $36.

Beggs calculated the average truck price softened $27 — the largest decline since the week ending December 2011. He added this is the second time since the week ending Sept. 16 where trucks declined more than the cars. That week, car prices slipped by $53, while the truck prices sunk $69.

So is all of this movement connected to gas prices?

“Some of the results right now might be a reflection of an upbeat spring market combined with the initial reaction to the current level of gas prices at the pump,” Beggs surmised.

“Even though gas had been steadily climbing over the past couple of months, in our area it has been very stable this past week with hardly any increase at the pump,” he continued.

“Some of the later model vehicles are appearing in more volume as this past week there were 33 models with initial market driven values included,” Beggs went on to say. “I expect the market to again be extremely active as dealers need inventory to fill some empty holes on the lot.”

In other Black Book developments, several of its editors watched new model presentations by manufacturers. 

“Bret Swanson saw first-hand the details of the Mazda CX-5,” Beggs recapped. “This is a totally all new, from the ground up vehicle. Nothing was overlooked for improvement or weight reduction. Even the seat bolts got attention from Mazda for a weight reducing redesign. The CX-5 gets the complete Skyactive Technology treatment with its focus on squeezing maximum efficiency from existing technologies.

“All this adds up to a new crossover with solid performance and very acceptable fuel economy,” Beggs noted.

Beggs went on to share about an automaker presentation he attended.

“I was able to see the detailed effort that the Chevrolet engineers have put forth with the soon to hit the market 2012 Camaro ZL1,” he began. “The management of air flow to push more air into the supercharger of the LSA 6.2L V8, which produces a seat pinning 580 horsepower, while also bringing more cooling air to the front brakes and also causing downward push of the car during high speeds, makes the car stick to the pavement. 

“Even though this is a very limited production model, the excitement it brings to the driver will be hard to match,” Beggs predicted.

Black Book reiterated its editors’ efforts are all part of the firm’s attempt to accurately project residual values for leasing and risk analysis within the lending market.

Beggs’ video can be viewed below.

 

Medium & Heavy Duty Trucks and Commercial Trailers

Beggs started Black Book’s specialty market analysis with what he called the “workhorses of the industry,” medium and heavy duty trucks and commercial trailers.

“Once again this month, and for the past six months, the average price of medium duty trucks has increased in value,” Beggs surmised. “The amount of inventory remains very tight at the auctions across the country. When breaking down the prices by model year, the newer year model trucks are softening just a bit.

The situation prompted Beggs to ask whether the recent rise in gas and diesel had an effect on the price trending.

“With fuel costs rising, maybe the lower value trucks that are more than 3 to 4 years old are getting more attention by the buyers,” he responded.

Black Book mentioned heavy duty rigs all across the country continue to sell at a fairly stable pace with minimal value adjustments in relation to their price levels. Editors noted the average value of all three heavy duty segments is higher today than back on Dec. 1.

“With fewer new trucks having been sold in each of the past five years, there are naturally less used trucks in the market today,” Beggs explained. “With a big push to export many of these lower volume work trucks to a growing construction market in South America, this leaves the U.S. market in a very strong position.”

Black Book indicated commercial trailers have steadily climbed in average value over the past five months.

“This is also driven by fewer trailers available in the market and the cost of new trailers having climbed due to material costs increasing,” Beggs pointed out.

“Black Book will be at the auctions to report any changes as they occur,” he continued.

“If you don’t see us at the auctions, you may run into a couple of our editors at National Truck Equipment Association Show this month as we get a first-hand look at many new models and the accessories that make these units do the job even better,” Beggs went on to say.

Motorcycles and Powersports 

Beggs admitted motorcycle and powersports models can easily create an increased heartbeat.

“This past month we spent a few days in Indianapolis at the Dealer Expo,” he recapped. “Thanks to all of the industry and market leaders who stopped by our booth to talk about the strength in the market and to see a demo of our just released Android app for motorcycle values, which joins our already available iPhone app.”

After last month’s big changes in pricing in the powersports market, Black Book discovered values continue to go up again but by somewhat smaller amounts.

Editors said prices for most late-model motorcycles and scooters are about 3 percent higher, but prices for ATVs and utility vehicles are basically unchanged, showing only very slight increases in pricing.

“Demand at the auctions has really been picking up as dealers look to add inventory, anticipating the arrival of warmer weather,” Beggs stated.

“If you haven’t stocked up yet, expect to pay more dearly at the auctions over the next couple of months,” he cautioned.

Black Book mentioned snowmobiles have been the biggest segment to buck the trends.

“They continue to drop off in value for the time of the year, declining by about 4.5 percent,” Beggs tabulated. “The general lack of snow across most of the country has really put a damper on the interest in sleds this year, and their prices are a direct reflection of the winter weather, or rather lack thereof.

“At the other end of the weather spectrum, personal watercraft and jet boats are up in price as spring approaches with average increases of around 3 percent,” he added.

Collectible Cars

With successful winter collectible car auctions in the books, Beggs insisted most market watchers are in agreement “that the hobby is alive and kicking.”

He went on to highlight that, “vintage exotics did very well, with a number of vehicles joining the million dollar club. Classic American cars from the 1950s and 1960s appeared to be stronger than at any time in the last several years, perhaps stealing a bit of the spotlight from the ‘not as many there as before muscle cars."

Beggs also mentioned that custom vehicles, which were generically referred to as hot rods in the past, were prevalent at the winter auctions and brought “strong money,” too.

“As we head into spring, you’ll start to see collectible cars start to emerge from their winter weather hibernation,” Beggs predicted.

“A car show, either a big fancy event or just a few guys at an impromptu get together in a fast food parking lot, is typically the best place to see some of these beauties in the next several months of spring and summer,” he surmised.

Campers and RVs

Beggs emphasized the RV market gives “us all a chance to escape the rat race, to tune in more with nature and to travel the country.”

Black Book noticed recreational vehicle values have begun their seasonal climb as evidenced by strong showings at the wholesale auctions.

Editors found motorhomes came in at $39,111, which was up by $1,657 or 4.5 percent above the previous month. They also noted towables including travel trailers, fifth wheels and camping trailers averaged $9,995, a jump of $198 or a little more than 2 percent.

“Activity at the auctions is also picking up as dealers stock up for spring, and sellers start to dispose of some inventory they have been holding onto,” Beggs indicated.

“Anyone who has ever stood out in the freezing cold bidding on some of the few hundred RVs at a typical auction can appreciation how much more pleasant it is once the weather warms up a little,” he continued.

“History tells us that prices will continue to increase for at least another few months so we hope to see you at an RV auction in your market area,” Beggs went on to say. “ADESA, Americas and Manheim all have nice RV sales, so log onto their websites or attend the physical auction and check out the market and units available. They all have provisions for remote internet bidding.”

Beggs’ video on the specialty markets can be viewed below.