GAINESVILLE, GA - This past week, Black Book editors adjusted more vehicles on average each day than anytime during the past year, at more 2,250 per day.
The week ending May 13 was the previous peak at almost 2,100 per day. With the large number of vehicles adjusted during the week, and only 23 percent of those being increases, the overall average change amount of all adjustments was -$105 for the week, $27 more than the previous week change. The last time Black Book reached this large of a decline was the week ending November 19, 2010 at -$122.
"Let’s take a more detailed look at the car and truck segments and their movement over the past week. The cars are down $20 on average for the week which brings us to five consecutive weeks of decline," noted Ricky Beggs, VP and managing editor for Black Book. "This was the second largest weekly decline in the cars since early in the year and the week ending January 28, 2011. Looking at the line graph that shows the tracking of the car changes we see a pretty tight pattern for the last three weeks."
According to Beggs, only the Prestige Luxury Cars (PLC) at -$89 stood out as an outlier. This week, xix of the nine declining segment types were within $11 of each other ranging from -$22 for the Full-size Cars (FSC) to -$33 for the Near Luxury Cars (NLC). The Prestige Luxury Cars (PLC) up by $4, was the lone increasing car segment this past week.
The trucks have now declined for 11 consecutive weeks, and this week at -$45 was the second largest downward weekly movement since last fall and the week ending November 12, 2010.
"Let’s not put the blame for this directional movement on the price of gas at the pump since this is the time period where gas has been declining in price," said Beggs. "This week, two truck segments showed some minimal strength as the Full-size Crossovers (FXU) increased by $7, and the Compact Pickups (CPT) eased upward by $4. With 6 of the truck segments declining greater than $50, the Luxury SUVs (LSU) at -$154, stood out well above the rest."
As the week progressed, Black Book editors continue to include more 2011 models with their initial market driven used values, as the company begins to see a sufficient volume of these vehicles, and others each week, that are being sold in the auction lanes. This week included several car models and a couple of utility models being priced.
"So what’s driving the market today and the current trends?" questioned Beggs. "There are more 2012's as new models hitting the dealers’ lots and showrooms each week. Normally just making room causes the one- to three-year-old used models to move downward, and it is showing up now with less push downward with the current used values than in most years. When comparing year over year values it is of no surprise that the space for the 2012 models has to be created."
According to Beggs, "We are still seeing a fair number of no sales but are also noticing that some, but not all sellers/remarketers may have slightly adjusted their floors reducing the number of no sales just a little. We will be watching this closely in the coming weeks. Tune in to see if this becomes a sustained trend."
Not all of the economic news the last couple of weeks has been at improving levels regarding better feelings in consumer confidence. "Unemployment has also increased over the past couple of months and is solidly in the 9+% level.
With dealers saying that the market is 'leveling off' to 'coming down but still above average,' what continues to mitigate a more typical seasonal adjustment is the words of several that 'there are not as many vehicles' and the 'selection was poor.' "