Black Book’s Ricky Beggs, editorial director for the publication, presented his commentary for the week ending May 3. According to Beggs, several survey reports mentioned a lower level of excitement in the auction lanes, and another report described lane activity as “wait and see.” He said these reports added to data on continuing lower conversion rates on many late-model units, especially within the cars segment.
Beggs said that as the final weekly adjustment report was tallied, Black Book found the truck segments still holding the line with only a minimal -$1 overall change even though there were positive changes on six of the 14 truck segments, led by the Compact SUVs at +$51 and the Mid-size SUVs at +$20. In addition to the six increasing segments, five additional segments declined by single digits.
Next, Beggs said the cars continue to soften, and based on the activity with the late model units, of which a good portion are from rental fleets, for the second consecutive week no car segments increased and only one segment had a single digit decline, the Entry Sporty Cars at -$9. With the overall car segment change of -$39, Black Book said they saw the largest declining level since the week ending February 1, 2013.
“Another interesting note is that all ten car segments declined by a larger amount than the week before,” Beggs said. “Is this a sign of the end of the spring market with the softening starting a little earlier than expected?”
Next, of all the changes made by Black Book’s editors during the past week, 54 percent were increases.
“The interesting note about the positive adjustments is that the volume of increasing adjustments within the truck segments and models was over four times the level of the cars,” Beggs said.
Next, Beggs said that as Black Book’s editors looked for the strength and stability in the market, all three of the pickup segments, along with both compact utility segments stood out with their trending patterns. Over the past 10 weeks each of these just-mentioned segments have either increased in value, or when depreciating week over week, the level of decline was limited to single digit levels.
“We feel functionality is the driver behind the interest and retention levels of these type vehicles,” Beggs said. “Several of these segments are mirroring similar sales trends as new models.”
Related to Black Book’s ongoing coverage of the marketplace, Beggs said Black Book had team members at a new car product meeting as well as the FICO World Conference this past week to go along with the editor attendance at several auctions.
“This all adds up to better enabling us to report the market as it relates to residual forecasting, supporting the lender needs and reporting the most current used market,” Beggs said. “Just as we received numerous comments this past week, we welcome your comments again this week and look forward to seeing you on the auction lanes. At least we don’t have to deal with the fifth week of the month scenario again this week. Have a great week.”