GAINESVILLE, GA - The rise in gasoline prices have been positive for 60 percent of the used-car segment types. On the other hand, the trucks overall have not been adversely affected, according to the Black Book "Beggs on the Market" report.
"This is definitely a question mark as I have had conversations with at least a half dozen people within the industry from fleet, to lenders, auction personnel, commercial remarketers, dealers, and even an automotive writer as well, as to what effect the price of gas was having on the trucks," said Ricky Beggs, VP and managing editor of Black Book.
The strength of the overall market continues to be impressive as the percent of adjustments being increases remained above the 65-percent level for the third consecutive week. This week, when looking at Clean and Average Condition adjustments, the amount climbed to 72 percent, based on the second most vehicles adjusted on a Daily basis over the past 10 weeks. Over the past four weeks of overall dollar increases the average change amount continues to climb, and at +$61 overall we have the strongest increase since almost a year ago for the week ending April 8, 2011 and its $66 increase.
This past week 6 of the 10 car segments increased in value at an average change of +$28 per segment. For the fourth straight week, the best performing segment at +$148 was the Compact Cars (SCC). The Entry Mid-size Cars (EMC) were also strong coming in at +$123, and then following pretty close were the Entry level cars (ELC) at +$81. The Premium Sporty Cars (PSC), down by $76, and the Prestige Luxury Cars (PLC), which declined by $35, continue to be the softest segments over the past few weeks. Again, more luxury focused cars are trailing the pack. Another sign of the overall strength in the market is that at least half of the car segments have increased over each of the past 5 weeks.
For the trucks, the past three weeks have shown an increase in average segment change each week, finishing at +$9 this past week. The number of segments with positive changes has also gone up over each of the last 3 weeks. This past week 10 of the 14 segment types increased, led by the Full-size Crossovers (FXU), up by $54, followed by the Full-size Pickups (FPT) at +$27.
"Looking ahead, where would I put my money?" asked Beggs. "The trend of the Compact Cars, Entry Level Cars, and Entry Mid-size Cars should continue to be in demand. With positive changes of up to six weeks on these three segments, I don’t see any reason for this pattern to change right now. On the truck side, there is also no sign at the current gas price levels, the tight used supply, and the flexible functionality of trucks and utilities, where a trending pattern contrary to the current one will have values backing up. This won’t continue all year as these have to depreciate at some point."
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