Used-Vehicle Market Stable

When demand is present, used-vehicle prices will generally increase or at least stay stable, according to the recent "Beggs on the Market" from Black Book.

Although the number of vehicles adjusted during the past week was right at 600 less per day than the previous almost record-level week, the percentage with increasing adjustments continued at a torrid pace of 61 percent, making a three-week run of 60-plus-percent increases, according to Ricky Beggs, editorial director for Black Book.

A variant in the adjustments this week related to the interest and values of average condition values in relation to clean condition values.

"Most weeks, the number of vehicles adjusted in these two condition categories is very similar," Beggs explained. "This past week, almost 400 more average condition vehicle values were adjusted in relation to clean and also at a higher percentage of increases: 62 percent versus 59 percent. We feel the drive in this variation is partly driven by the continued need for more price conscious cars as we come to the end of the tax season sales."

Overall, the market is very stable with segment average changes week over week at -$3 for the cars and a +$3 change for the trucks. "The previous time we had this level of stability was almost a year ago for the cars for the week ending April 6, 2012 at a +$1 change," Beggs noted. "The trucks were also at that +$1 increase that same week while the trucks had one other positive weekly change more recently at a +$5 change the week ending Dec. 21, 2012."

Looking a little closer, the cars finished with the -$3 overall segment average change as seven of the ten car segments increased. The declining levels of the Prestige Luxury Cars and the Premium Sporty Cars at -$72 and -$63 respectively, were the lowest declining amounts over the past five weeks for the Premium Sporty Cars and for four of the past five weeks on the Prestige Luxury Cars.

The Compact Cars at +$31 and the Upper Mid-size Cars at +$24 had the most positive movement this past week. Another positive note is the Entry Mid-size Cars have now had increasing adjustment levels for six consecutive weeks. The Entry Sporty Cars and the Full-size Cars hopefully will be starting a positive trend in change after increasing this past week.

The trucks at an overall positive change of +$3, with seven of fourteen segments going up, is almost a mirror reflection of year ago levels which finished at +$9 when ten of the fourteen segments increased.

This past week the Compact SUVs led the change levels at +$52 with a truck market leading six consecutive weeks of increasing values for this segment. The Full-size Pickups at +$30 this past week, have a solid market three week increasing run.

"What’s ahead for the market? Hopefully, a break in the winter weather for parts of the country where retail activity can have a little more consistency, thus more activity at the auctions as well with trade-ins being consigned and buyers present needing to fill an empty hole or two hopefully bringing more interest to the lanes," Beggs said. "The delay in some of the retail traffic in those snow covered areas will create some pent-up demand. In time, the market will be there to cover the needs possibly with stronger values on some units. We are nearing the end of the tax season buying, but the $10,000 and under used car is still getting plenty of interest. And even though gas at the pump is down for three weeks running, and now at $0.17 less than a year ago, the small sedans are still in demand at many auctions."

View this weeks' video below: