CNW Follows Used-Vehicle Transaction Prices by Marketplace

By Joe Overby, Staff Writer
April 16, 2008

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BANDON, Ore. — According to CNW Research, the used-vehicle industry experienced an overall decline in average transaction prices during March. But as company president Art Spinella noted, some markets actually showed an upswing in prices.

More specifically, CNW pointed to the Shreveport, La., area as displaying the highest year-over-year increase in average used-vehicle transaction prices for March.

Though the nationwide average dipped almost 3 percent, the average used-vehicle price in Shreveport jumped 13.89 percent from March 2007 to March 2008.

"The Shreveport, La., DMA (designated market area) registered the largest used-car transaction price increase in March this year versus a year ago, reflecting a rebounding economy in that state," explained Spinella.

"Not on the accompanying list is New Orleans, which showed a 2.5-percent increase and placed 11th, with Baton Rouge at 12th," he added.

In fact, New Orleans showed a 2.5-percent incline, well above the overall decline.

"The total industry in March had a 3-percent decline in overall transaction prices, but as with anything, there are some hot markets. Used cars in Louisiana are finally rebounding after Hurricane Katrina," Spinella reported.

Another strong state was Pennsylvania, which had three of its markets crack the top 10.

Wilkes Barre-Scranton, Pa., showed the second-highest improvement on the list after Shreveport, with an 11.09-percent rise in price from last March.

Other Pennsylvania markets included Erie, which was fourth at a 7.7-percent price jump, and Pittsburgh, which grabbed the eighth spot at 2.76-percent increase.

On the opposite end of the spectrum, Wichita Falls, Texas/Lawton, Okla., showed the largest decreases in average used-vehicle prices.

Its average price fell 14.66 percent from the previous March. Meanwhile, Monterey-Salina, Calif., was next with a 10.9-percent downturn.

The Big 3 hub of Detroit also showed significant drop-offs, as average used-vehicle prices experienced a 9.5-percent downturn from last year.

The following is the complete top 10 list for largest price increases and decreases, respectively.

Highest Price Increases

Shreveport, La. — 13.89 percent

Wilkes Barre/Scranton, Pa. — 11.02 percent

Buffalo, N.Y. — 8.84 percent

Erie, Pa. — 7.7 percent

Juneau, Alaska — 5.73 percent

Charlotte, N.C. — 3.52 percent

West Palm Beach/Fort Pierce, Fla. — 3.05 percent

Pittsburgh — 2.76 percent

Miami-Ft. Lauderdale, Fla. — 2.37 percent

Cincinnati — 2.27 percent

Highest Price Decreases

Wichita Falls, Texas and Lawton, Okla. — 14.66 percent

Monterey-Salinas, Calif. — 10.90 percent

Detroit — 9.5 percent

Sacramento/Stockton/Modesto, Calif. — 9.43 percent

Sioux Falls/Mitchell, S.D. — 8.87 percent

Omaha, Neb. — 8.80 percent

Chico/Redding, Calif. — 8.33 percent

Yuma, Ariz. and El Centro, Calif. — 8.14 percent

Santa Barbara/Santa Maria/San Luis Obispo, Calif. — 7.96 percent

El Paso, Texas — 7.8 percent

Shopping Time Increases

Moving on, even though average used-vehicle prices are down nationwide, the shaky economy seems to be having an impact on consumers. In fact, the time it takes for consumers to purchase a used vehicle has been on the upswing, according to Spinella.

"On the used-car side a similar pattern is seen (to what is being seen on the new-vehicle side)," he said. "It now takes nearly four months of shopping before acquisition compared to less than three months a few years ago."

The changes are evident among new-vehicle shoppers, as well.

According to CNW, new-vehicle shoppers took an average of seven months from the time they initially decided to buy a new ride to when they actually made the purchase.

This was up from a six-month decision time in 2006 and less than five months in 1996.

The reasons why consumers are taking longer to shop?

"Longer loan contracts, worries about the economy and family budget issues are all adding to the time needed to acquire a vehicle," Spinella suggested.

For more information, visit www.cnwmr.com.

Used Car Manager