GAINESVILLE, GA - Heading toward fall and the introduction of the majority of the new model-year 2011 vehicles, normal expectations are a softening in the market, especially on later model-year vehicles, according to Ricky Beggs, VP and managing editor at Black Book.
“The adjustment for last week brought the second consecutive week where the number of vehicles with raises in the values adjusted came in within the mid 20-percent range. This previously occurred in consecutive weeks during the last week of May and the first week of June,” explained Beggs. “Prior to that time period, there was a 16-week period from October 9, 2009 to January 22, 2010 with very limited adjustment increases. In nine weeks of this 16-week period, there were even single digit percentage increases.”
According to Beggs, comments from dealers at auctions this past week and from many of the Black Book survey personnel varied greatly. “Several said that demand is holding steady, with more dealers than not being very upbeat about the wholesale and retail activity,” said Beggs. “It seemed that many continue to feel the real stability in the market is in the vehicles priced between the $7000 to the $10-12,000 range. The overall economic conditions and consumer confidence probably plays a big part in this market priced level. Several dealers also mentioned that they were watching inventory for both volume and price, as they focused on the market reaction as we enter the end of model year season.”
The car segments continue to be the softer segment types, according to Black Book. With all 10 car segment types falling below the $0 baseline, the overall car change was -$49 for the week. The Prestige Luxury Cars (PLC) declined the most for the past three weeks. The two car types with the most stability and smallest adjustments are the Sub Compact Cars (SCC) at -$18 and the Sporty Cars (ESC) at -$22.
The truck segments continue to be garnering plenty of attention. “These are fairly stable with four segment types increasing in the past week. The segment with the largest drop in value was the minivans in cargo configurations at a nominal -$52,” said Beggs. “Overall, the 14 truck segments decreased $13 for the week.”
Beggs commented on another interesting note within the market that is also reflective of some of the dealer comments. “There were an additional 274 Average Condition vehicle values adjusted as compared to the Clean Condition vehicle values this past week. Even in a softer market, we have always witnessed really nice, clean vehicles will have more interest, more bidders and stronger values,” said Beggs.
Black Book added an additional 36 2010 vehicle listings with initial market driven values over the past week. The 2010 and 2009 vehicles continue to be the toughest sell in the wholesale arena as the relation to the new models is pretty competitive, noted Beggs. “With the overall very limited supply of used models, and the price level of the late model used vehicles being so strong, the monthly payment of new versus used continues to be a factor in dealers not wanting to speculate on the late model vehicle,” he said.