Not Your Normal December Used-Vehicle Market

GAINESVILLE, GA - Over the last few years, many of us in the industry have said we are not in a "normal market," according to Ricky Beggs, VP and managing editor for Black Book. This has referenced supplies, value trends that have seen both up and down movements, and some of those trends do not match the more historical patterns. A specific current example is the 31-percent-plus level of adjustments that are raises to the previously published value for each of the past three weeks. This level of strength is typically only seen in the March/April time of the year.

"When I say it is not your normal December market one only has to stand on some of the auction lanes or watch some of the online offerings and then to see the comments passed along by the Black Book survey personnel," Beggs said. 

"While we try to talk with as many auction managers and owners as possible each week, as well as the auctioneers, I also look forward to the video market report posted by John Brasher of Brasher’s Sacramento," Beggs commented. "This past week, John described his auction as 'much stronger than a typical winter market.' He continues to be amazed at how we are all talking about how strong the market is. It is not just Brasher’s Sacramento with this level of strength in the market on the west coast but the Black Book survey person at Manheim Seattle described the increasing market was probably because of the east coast vehicle demand."

According to Beggs weekly "Beggs on the Market Report," one of the multiple mentioned items in survey reports referenced the interest and demand for three- to five-year-old models. "This age of vehicle has been in low supply due to many of today’s trades being older than normal and also that we are at the lowest point in supply of end of term leases coming into the market," Beggs noted. "And, don’t forget this three- to five-year-old type vehicle fits a very affordable used price level as well as being a great CPO candidate."

Beggs reviewed some of the most recent segment movement. The overall car segment change at -$55 was the third lowest average segment change since back in August 2012, 17 weeks ago. Beggs noted that the best retention level was within the Compact Car segment at -$19. For the past four weeks this segment change has averaged -$19. The Entry Mid-size Cars at -$24 this past week, have been almost as stable as the Compact Cars with a four-week average decline of -$22.

The Entry Level Cars at -0.89 percent, or -$55, have now declined by at least one half a percent for each of the past three weeks. This is the only car segment with this level and consistency of decline.

"Where two weeks ago, there were three truck related segments that increased, this past week there were only two, the Compact SUVs at +$6 and the Full-size Wagons at +$3. There were three other segments with very small declining levels, the Mini Cargo Vans at -$4, the Full-size Cargo Vans at -$7 and the Full-size Pickups at -$10," Beggs noted. "Two of these have been mentioned quite often as segments that could show an increase in values based on the needs from the hardest hit areas related to super storm Sandy, and now this is actually taking place."

View the video below: