Latest KBB Shopper Activity Prompts Wholesale Search Recommendations

Along with a list of suggested models that cost-conscious used-car managers could leverage to boost fuel-efficient inventory and still stretch floor plan dollars, Kelley Blue Book said that dealers planning to buy vehicles at auction should pay particular attention to midsize cars and compact crossovers.

Why?

Analysts reported in the August Blue Book Market Report that each of these segments has steadily increased in shopper activity from visitors to Kbb.com.

Since January, share of used-car shoppers has jumped for the compact crossover segment from 5 percent to 5.5 percent.

“Although a relatively mild overall increase, it is noteworthy since many other competing high-volume segments have trended downward or remain flat,” noted Alec Gutierrez, senior market analyst for automotive insights at Kelley Blue Book.

Share of Kbb.com site visitors viewing midsize cars has increased from 15.9 percent to 16.1 percent since January.

“A relatively mild increase but still worth noting,” Gutierrez stressed.

KBB added that consumers remain highly interested in compact cars with 17.8 percent of all used-vehicle intenders shopping the segment in July.

“Although compact-car interest is higher than both compact crossovers and midsize cars, interest is trending downward since fuel prices peaked,” Gutierrez pointed out.

To assist dealers looking for inventory this month, Kelley Blue Book highlighted 10 vehicles that are three years old and are available at a considerable discount from original MSRP.

“Since these are among the most affordable models in their respective segments, values should be relatively steady in the months ahead, even as the overall industry is expected to decline,” Gutierrez projected.

After sharing the list, Gutierrez reiterated that dealers should remain cautious in the short term and avoid paying premium prices for fuel-efficient vehicles.

“Although values may increase slightly in the short term, if fuel prices continue to rise, the increase only will be short-lived,” he predicted.

“The current run-up in fuel prices likely will run its course as summer winds down and we expect fuel prices to continue to trend downward, along with values of fuel-efficient vehicles,” Gutierrez continued.

“Consumers will continue to seek fuel-efficient vehicles,” he went on to say. "However, they will not pay a premium, especially with so many new fuel-efficient vehicles available with lease payments below $200 per month.”

Luxury Model Tops Kelley Blue Book’s Hot Used-Car Report

Arthur Henry, manager of market intelligence and market analyst for KBB, indicated that the 2010 Mercedes-Benz M-Class increased its traffic share more than any other used model during July. The unit moved 42 percent higher month-over-month, according to Kbb.com’s traffic data.

“For those dealers who currently have the M-Class on their lots, it is currently valued at $13,500 less than the Fair Purchase Price of a brand new M-Class,” Henry noted. “Consumers who shopped the 2010 M-Class in July also researched vehicles in the entry-level luxury segment.

“The top models that were cross-shopped among entry-level vehicles were the Mercedes-Benz C-Class, BMW 3-Series and Audi A4, respectively,” he continued. “Other luxury SUVs that are highly cross-shopped include the BMW X5 and Lexus RX.

“In general, used M-Class shoppers are attracted to the luxury space and are looking to spend roughly $28,000 to $35,000 for their next vehicle,” Henry went on to say.

While not improving as much month-over-month as the Mercedes-Benz model, KBB noticed nine other units posted shopper traffic gains of at least 6 percent in July. That cluster included:

—2010 Ram 2500/3500:  up 24.7 percent
—2010 BMW 5 Series: up 21.4 percent
—2009 Toyota RAV4: up 19.9 percent
—2010 Subaru Forester: up 19.7 percent
—2010 Toyota RAV4: up 12.4 percent
—2010 Ford Escape: up 8.9 percent
—2010 Honda Accord: up 8.4 percent
—2010 Toyota Camry: 6.7 percent
—2010 Honda Civic: up 6.2 percent

Going in the opposite direction is a group of 10 vehicles mainly from domestic automakers. The units that sustained the greatest month-over-month drop in shopper activity in July included:

—2008 Honda Civic: down 7.5 percent
—2008 Jeep Wrangler: down 10.1 percent
—2006 Ram Dakota: down 19.4 percent
—2010 Dodge Charger: down 23.2 percent
—2007 Mazda Miata MX-5: down 27.0 percent
—2010 Dodge Avenger: down 35.5 percent
—2010 Ford E-350 Super Duty Passenger: down 46.5 percent
—2007 BMW Z4 M: down 48.8 percent
—20007 Mercedes-Benz CL-Class: down 52.5 percent
—2009 Ford E-150 Cargo: down 76.5 percent

KBB also shared which vehicle segments posted the strongest month-over-month shopper activity gains:

—Hybrid Car: up 6.0 percent
—Luxury Crossover: up 5.1 percent
—Full-size Crossover: up 4.7 percent
—Compact Crossover: up 4.6 percent
—High Performance: up 3.8 percent
—Midsize Crossover: up 1.7 percent
—Luxury Car: up 1.3 percent
—Midsize Car: up 1.3 percent
—Midsize SUV: up 0.3 percent

Meanwhile, the segments that softened the most month-over-month included:

—Minivans: down 0.3 percent
—Premium Luxury Car: down 0.8 percent
—Entry Luxury Car: down 1.5 percent
—Premium Sports Car: down 1.7 percent
—Full-size Pickup: down 1.8 percent
—Luxury SUV: down 1.9 percent
—Subcompact Car: down 2.1 percent
—Full-size SUV: down 2.2 percent
—Midsize Pickup: down 2.2 percent
—Sports Car: down 3.2 percent
—Full-size car: down 3.4 percent

Kelley Blue Book’s Hot Used-Car Report captures monthly used-car shopper activity on Kbb.com, including a list of the top and bottom movers in the same time period.

“Results are provided by the Kelley Blue Book Market Intelligence Team, in an effort to help dealers better understand which used vehicles consumers are looking at most each month,” Henry concluded.