Beggs: ‘Normal’ Doesn’t Describe Close of 2012 Wholesale Market
Along with offering his thoughts on what this year might hold, Black Book’s Ricky Beggs didn’t use the term “normal” to describe the closing of 2012.
In his first online video analysis of 2013, Beggs told dealers that “throughout these party-filled holidays and a couple of slightly shortened work weeks, I must tell you that from our auction attendance at both physical and online auctions, the facts presented by the data we have recently received and the comments from the dealers we have talked with recently, the market would not be described as normal in relation to the December activity of the past few years."
In continuing his commentary contained in the latest episode of “Beggs on the Used Car Market,” the managing editor highlighted trends that’s been going for the past six weeks.
“The percentage of adjustments requiring raises to the most recent published values has been at levels we have only seen after the calendar has turned to the first quarter of a fresh year,” Beggs said. “The initial push of strength we believe was a result of additional vehicles needed to replace many of those damaged during Hurricane Sandy.
“The most recent strength has to be the overall pent-up demand bringing forward an early spring market,” he continued. “Consumers have put off buying their next new or used car as long as they can or at least want to. Their current car is old and consumers want to move forward now that the election issues are behind us with only the fiscal cliff still hanging over our heads.”
During the past six weeks, Black Book found the increases amounted from a low of 31 percent of the adjustments to a solid 50 percent this past week for a 39-percent average during this period.
Looking next at specific vehicle segments, editors found that the average truck segment price change produced a $5 gain, fueled by the strength of full-size vans. Among the units, passenger versions moved up $74 while cargo models jumped by $56.
While not to the vans’ level, Black Book discovered several other truck segments posted price climbs last week, including full-size pickups (up $5), compact pickups (up $3) and compact crossovers (up $3).
Meanwhile on the car-segment side, overall prices slid $37, the smallest average decline during the past five weeks and the second smallest decline since the week ending June 15.
Even with the national average gas prices at the pump at $3.26, only 1 cent above the low point of the last year, editors noticed the three smallest cars in physical size that offer the most fuel efficiency also boast the most stable values within the car segments. Black Book found entry level cars softened by just $1 while compact cars (down $5) and entry midsize cars (down $6) didn’t drop by much.
“The better equipped entry type cars are helping make these segments more enticing as consumers are not having to give up all the creature comforts with today’s smaller vehicles,” Beggs said.
Beggs wrapped up his latest analysis by looking ahead.
“If history is an indicator, the market should continue to show stability and maybe even a little strength,” he said. “The past four weeks during December with positive changes averaging 40 percent, almost one year ago during January 2012, the four-week positive changes averaged 48 percent.”