Several Factors Impact Used-Vehicle Values

June 11, 2012
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GAINESVILLE, GA - Gasoline prices are continuing a downward decline according to the recent Beggs on the Market report, another 5.7 cents this past week to a national average of $3.61 per gallon at the pump.

BEGGS
BEGGS

"Unemployment reports indicated a slight uptick. So, one item is good for our pocketbooks as consumers and another is not so good. From the lanes and survey reports there were some interesting comments," according to Ricky Beggs, VP and managing editor of Black Book. "There was a report out of Michigan showing 'sales percentages are down and neither buyers nor sellers are happy.' A Texas report from the Houston area indicated a 'slightly better market' while back east we saw 'mostly picky buyers.' "

Overall this past week, the softness continued as the average segment price went down by $29, which is still in the -0.2-percent level. We at least had one car segment that increased for the week as the Entry Sporty Cars (ESC) finished a mere $3 to the good side. Not surprisingly, the four best fuel efficient segments were all at the strongest declining amounts, ranging from -$60 on the Upper Mid-size Cars (UMC) to -$51 for the Compact Cars (SCC), followed by the -$47 and -$44 for the Entry Level Cars (ELC) and the Entry Mid-size Cars (EMC) respectively. 

"For the first time in several months, all 14 truck segments declined for a weekly period, with three segment types declining by $50 or more," Beggs noted.

The Mid-size Crossovers (MXU) was the weakest segment at -$65 while the Full-size Crossovers (FXU) slid down by $53. The real surprise was not that the Compact Sport Utilities (CSU) declined, but the -$50 level of change. This segment had been the lone positive retention segment for the previous 3 weeks. Overall the trucks averaged a -$37 change per segment, an $8 increase from the previous 2 weeks.

"With overall changes and trending, I was not surprised to have only 16 percent of the necessary adjustments this past week being increases in value. This was the lowest number of positive adjustments since the week ending November 23, 2011," Beggs noted. "The softness in the market, especially the one- to two-year-old models is driven partially as the market is making room for another model-year, the 2013 models that will be here before we realize."

Getting ready for these newest models, several Black Book editors had the opportunity to attend manufacturer presentations of these coming new models and also some of the impressive changes to the existing models.

"With totally new cars such as the Dodge Dart and the Cadillac XTS, for example, the initial interest is pretty strong. With some refreshes, such as the V-6 engine upgrade like will be found with the 3.6L V-6 in the Equinox and Terrain, you get better horsepower and performance and at least as good fuel economy. There are interior upgrades giving better ergonomics within the center stacks on other models as well. All of these will eventually play a factor in the future used values," Beggs said.

View the video below: 

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