GAINESVILLE, GA - According to the recent Beggs on the Market report, it has been an interesting week in the used-vehicle market with a variety of views regarding the demand, or lack of it, for used inventory, as well as various comments about the increasing gas prices, now at $3.72 a gallon after another $0.07 increase this past week.
"We are now at a $0.12 premium over one year ago, but still under the $4.11 peak of 2008," noted Ricky Beggs, VP and managing editor for Black Book.
According to the recent Beggs on the Market report, there were several survey summary reports with comments relating to the rising gas prices and the resulting effects on the market. "Two of the three comments saying there was interest and demand for the more economical and higher miles per gallon vehicles and they came from states with higher than the national average gas prices, with some reaching the $4.20 level," Beggs said. "The third state with comments on economy level cars is at the $3.95 to $4 level. Interestingly, another report from an Indiana auction reported that gas prices have yet to have an effect on the trucks and utilities. Gas prices in most of Indiana are only a dime more than the national average."
There is one other often mentioned comment from the Black Book survey personnel and that relates to the higher mileage levels on a significant number of units being run down the lanes.
"Part of the higher mileage is due to the older cars being offered. A report from Michigan even specifically mentioned the 10-15 year old cars coming in," Beggs said. "We have recently talked about the aging trade-ins and how they are not being kept for retail, but being distributed into the wholesale channels."
Even though there continues to be a solid number of no sales, the number of adjustments was at an average of 2,546 vehicles adjusted per day. This is the largest daily adjustment level over the past five weeks.
"Taking a look at the 10 car segments tracked by Black Book gives us an average segment change this week of -$63. This is just a slightly stronger decline than the last 4 week average of -$57," according to Beggs.
One year ago, the average segment change for the cars as at -$39 with no segments increasing. This past week the -$145 change of the Prestige Luxury Cars (PLC) and the -$77 of the Luxury Level Cars (LLC) is reflective of what we have been reporting that luxury vehicles are expected to have larger declines during the fall market.
"Even with gas increasing, the more fuel-efficient segments continue to have larger percentage declining levels, led by the Entry Mid-size Cars (EMC) at -1%, the Entry level Cars (ELC) at -0.75% followed by the Compact Cars (SCC) and the Upper Mid-size Cars (UMC) at -0.71% and -0.68% respectively. The percentage change of all cars was at -0.47% as a reference point," Beggs said.
The 14 truck segments had an average segment change of -$44 or -0.36%, right in line with the most recent four-week average and just $4 more than the -$40 change a year ago. Although there were no truck segments increasing for the week, Compact Pickup Trucks (CPT) fared the best at a minimal change of -$6. The Luxury SUVs (LSU) at -$78 was the strongest declining segment now for the fifth consecutive week. Interestingly, one year ago the Luxury SUV segment was the leading declining segment as well at -$124.
"As Black Book reports the market on a daily basis, the foundation of the data to support the values we publish comes from the industry’s most realistic and truest wholesale market, the auctions of the National Auto Auction Association (NAAA)," Beggs said. "This week we are celebrating National Auction Week. Since 1955, when Black Book was established, we have been reporting and supporting the market and the auctions. Our congratulations go out to the NAAA and this year’s President, Charlotte Pyle. We appreciate all of the NAAA member auctions and their general managers and staffs for their contributions to the used market industry."
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