GAINESVILLE, GA – The used-car market is experiencing increases in values across the board. All 10 car segments increased in value and the total truck segment group also increased over eight consecutive weeks, according to a recent report by Black Book.
In Black Book’s Weekly Adjustment Report, all 10 car segments increased in value for the second time in the past three weeks, and the total car segment average was in positive territory for the sixth week in a row.
The total truck segment group has increased in value for eight consecutive weeks. The only individual segments not having positive adjustments were the full-size vans and full-size wagons with a combined average drop of -$29. Full-size pickups and compact SUVs led the truck market by increasing $115 and $105 respectively, according to the Black Book Report.
According to Beggs, “Many are wondering when the strength will peak out. Most are also amazed at the pricing level of some of the late-model used vehicles, but continue to bid because you must have inventory in stock to meet the retail customers’ needs. And all indications are that the used vehicles are moving in the retail market faster than normal. Inventory is just not sitting around aging.”
“Just like many of you, I also wonder if and when the increasing values will come to a halt. The payment difference for one and two year old used cars has to be almost on top of the new car payment,” said Beggs.
Every month, Beggs reviews a report tracking 50 popular vehicles for several different model years. He looks at changes in the market from one year ago, six months ago, and compares these values to today’s values, then reviews how he believes these model values will behave going forward one and two years down the road. For purposes of this market report, he references 2007 models.
The most recent report, which looks at vehicle values from one year ago in July 2008 to present day, and then two years ahead, showed that 16 percent, or eight of the 50 models, have risen in value during the past year. “Obviously, this is not a normal trend, as we all expect non-collectible vehicles to depreciate in value over time,” commented Beggs.
These eight models increased in value from $400-$2100, averaging $1203 appreciation. The overall average change of all 50 models, including the eight that went up, dropped $2109 or -12.6 percent, 5 to 6 percentage points better than what would be considered normal.
“This past year has been one of great volatility both up and down,” notes Beggs. With the previous normal average annual depreciation on 1-3 year old models being around 18-20 percent, the period from 2008 to 2009 has turned out to be much better in retention. All models finishing in positive territory were either pickup truck or sport/utility vehicles.
“Our projections for the next 12 and 24 months on all 50 models in the report came in at -$2829 and -19.3-percent depreciation between now and July 2010, and another -$1831 and -15.5-percent depreciation for the next period ending July 2011 from July 2010,” said Beggs.
To view Beggs’ weekly video, visit: www.BlackBookUSA.com.