CARMEL, IN – Black Book reports that most segments of the used-vehicle industry have remained strong over the last 30- and 90-day periods ending May 1.
“With all the negative and troubling news we have constantly heard during 2009 calendar-year, it is very exciting to announce that 16 of the 24 unique vehicle segments being tracked by Black Book have appreciated over the past 30 days ending May 1,” said Ricky Beggs, VP and managing editor in a recent Black Book market analysis. “Those 16 segments increased an average of $217, and the average decrease for the eight that went down was only $122.”
Four of the top five segments were SUVs or crossover-type vehicles, with an average increase of $355 (2.2 percent). The bottom five segments, a combination of cars, full-size vans/wagons, and compact pickups, decreased an average of $166 (0.72 percent).
When analyzing the previous 90-day period, the market continued to look more positive than downward in nature, notes Black Book. Fourteen of 24 segments improved in value from February 1 through May 1, with the top five increasing an average of $1,421 and the bottom five dropping only $628.
“Over the past year we have witnessed the most volatile and unpredictable period in the last 35-40 years of the used auto industry,” said Beggs. “The average depreciation of 2007 through 2003 model-year used vehicles was -23.75 percent during the last 12 months, considerably more than the typical depreciation of 16- 18 percent. Seventeen of the 24 segments we track decreased over 20 percent during the past year, the worst being Prestige Luxury Cars at -27.1 percent.”
Black Book’s recent report states the best performing segments over the past year were compact pickups, compact sport utilities, full-size pickups, full-size sport utilities, full-size vans, mid-size pickups, and mid-size sport/utilities, dropping an average of only 13.2 percent.
“Considering the record levels of unemployment, mortgage foreclosures, radically fluctuating gas and diesel prices, and the overall struggling economy we have been faced with over the past year, these results are actually fairly good news,” said Beggs.
The main driver helping to hold values up continues to be the limited supply of used vehicles in the marketplace. Also, with fewer trade-ins at the franchised dealerships, we are seeing the new car dealers putting an increased focus on acquiring used vehicles from other sources, requiring them to spend more time at the auctions, both physically and online.
“We do not expect the volume of available vehicles to increase anytime soon, as the size of the rental fleets are down year-over-year, lease returns will not improve enough to change the number of vehicles available, and there have not been any indications of significant increases on the new car side,” stated Beggs.
Recent announcements of temporary and even permanent closings of plants relating to the Chrysler bankruptcy proceedings, and uncertainty over General Motor’s future, could add even more reliance on the late model used car and truck markets.