Beggs: Wholesale Prices See Overall Declines Similar to Last Year
Wholesale prices are looking quite similar to the market dealers experienced last year at this time, according to the latest "Beggs on the Used Car Market" video report. And most car and truck segments all saw mild declines.
First, the car segments saw an average decline of $70 in the lanes last week, reported Ricky Beggs, Black Book managing editor. This compares to an average $72 decline for the car segments during the same period last year.
“Overall, wholesale prices have continuously trended downward over the past several months. But there have been several categories that have shown more volatility than others, seeing wild seesaw price changes over the last three months,” Beggs noted.
And which car segments saw the biggest changes?
"The entry-level cars (Hyundai Accent, Chevrolet Aveo, Honda Fit, Pontiac G3, Mazda2, Kia Rio, Nissan Versa) segment have displayed above-average volatility during the past three months, with prices dropping an average of $82 this past week compared with just $4 the previous week," Beggs said. "Interestingly enough, the entry-level cars category has performed better than the overall price average for all car segments during this time period."
And only one other car segment had a greater dollar change: the premium sporty cars, which fell by $171.
This makes the fifth consecutive week this segment has declined by $100 or more, Beggs shared.
Moving on to highlight the truck segments, prices here stayed more consistent than their smaller counterparts, which may reflect the fact that this past week marked the third week in a row gas prices had declined, coming to rest at $3.80.
“The last time the price was this low was the week of March 5, 2012,” Beggs stressed.
“The trucks continued to retain their value better than the cars, but with a slightly larger decline of $49 this past week as compared to two weeks ago, when the average was $15 … the year-ago average was (a decline of) $43, which was very close to this year’s adjustments,” he continued.
Though, overall, the prices in the truck segments remained fairly consistent, one category dipped a bit more.
“The most volatile truck category during the past three months has been the full-size SUVs. This segment includes Nissan Armada, Jeep Commander, Dodge Durango, Ford Expedition, Toyota Sequoia, Chevrolet Suburban and GMC Yukon. Values in this segment dropped by an average of $74 this past week compared with the week of Sept. 14, when segment values dipped by just $14,” Beggs explained.
Granted, most segments saw declines. However, of the 2,137 vehicles adjusted (on average) per day last week, 27 percent of the adjustments required a raise to the previously published values, Beggs shared.
Beggs also shared a bit of information on the current leasing market, after recently attending the ACLV (Association of Consumer Vehicle Lessors) conference.
Beggs noted leasing is currently at 23 percent of the new-car sales volume.
“This is being accomplished without heavy incentives. Where most current end-of term values are stronger than the projected values of three years ago, there is a focus by additional lenders to join the lease origination ranks,” he added.
“When Black Book completes our analysis of the new models and projects the residuals for consumer leases, the strength of the used market going forward is expected to be less aggressive than the current market today,” he concluded.