Hello and welcome to this week’s edition of Beggs on the Used Car Market. Thanks for tuning in.
The slightly delayed spring market was still present on the auction lanes this past week. Activity was great, values were solid with 55% of the adjustments being increases in values, and as usual, there were still a certain amount of no sales. With comments like “a red hot market” and “a feeding frenzy on the lanes”, the trend in values was no real surprise as we completed our analysis, making just over 2040 adjustments each day.
A quick glance at the Weekly Average Change chart for the cars shows tremendous wholesale interest. We have the greatest weekly positive change in well over a year, with a $33 swing from -$11 to +$22. This was the result of 7 of the 10 car segment types going up in average value for the week, with the biggest movers being the Entry Level Cars (+131) and Entry Mid Size Cars (+41). Trucks fell an average of $29, which was only a few dollars more than the previous two weeks. The biggest movers were the Full Size Pickups (-65) and Full Size SUVs (-102).
Most of the time, the wholesale market is driven by the results of recent retail activity and sales. With the interest and talk on the lanes from the past two to two and a half weeks continuing to be focused on more fuel efficient cars, I was slightly taken back after talking with a few franchised and independent dealers who said their most recent retail sales, both new and used, were trucks, SUVs, and mid and full-size cars, with very little increased interest in higher MPG cars.
The cars are hot, so how does this relate to the various specialty markets that Black Book Reports on? We are at the start of the season for people to start thinking about getting their motorcycles out and riding again. The 70th Anniversary of Bike Week in Daytona is currently in full swing.
A few weeks ago we had the opportunity to speak with many dealers at the Dealer Expo, and are excited about so many using the Black Book Official Motorcycle & Powersports Value Guide to stay on top of current pricing trends. Prices are currently increasing some every week as the dealers are preparing for the appearance of warmer weather. As we continue to track the market, we expect prices to rise even more for the upcoming April edition.
The 2-4 year old versions of many bikes are showing extreme strength, while the one year old versions are holding tight. At some point the consumer will realize that the new bike or barely used bike doesn’t cost that much more than the used 2-4 year old model. When looking at the Auction Wholesale values for the Harley-Davidson 1200 Sportster in the March guide, there is only about a $390 difference between the 2007 to 2008 model and another $375 between the 2008 to 2009 model, while the slightly used 2010 from 2009 model spread increaseing to $900.
Looking toward another specialty market that is part of the Black Book data and services, the Medium and Heavy Duty Trucks and Commercial Trailers, we see these values following the trend and strength of the auto and powersports markets. The very solid, good condition 2008 and 2009 class 7 & 8 trucks and tractors are showing exceptional strength, with some value adjustments of as much as +$3000 for the March published data. The alternative to these strong values is waiting for a new model, at a significantly higher expenditure.
The price of diesel fuel is climbing similarly to gas prices and is up 13% over the last 12 consecutive weeks. At the same time, freight tonnage continues to rise along with a better perceived economy. Demand to haul the extra freight continues to push the late model values up. We will be at NTEA this week in Indianapolis, so when you see us there in the educational sessions or on the exhibit floor, let’s talk about how you see this specialty market.
The specialty collector car market covered within the Black Book CPI Value Guide often exhibits the most passion and volatility. This market is firming up after some adjustment during the recent struggling economy. The most recent collector car auctions were strong and even though there were the exceptional transactions like the 1970 Plymouth Hemi ‘Cuda Convertible that brought $1,700,000, the majority of vehicles saw more modest increases.
The vintage exotic market has been hot for at least a year now. For example, a very nice 1955 Mercedes 300SL Gullwing just sold in the $700,000 range, while just 6-7 years ago, top dollar on these cars was around $320,000.
When looking at the popularity of custom cars, the market value is really “in the eye of the beholder” as they are all unique in quality, engine enhancements, body work, and even the quality of the paint job.
There is another specialty market under the Black Book umbrella, the improving and growing RV market. Next month we will give you an update on this market. In the meantime if you are interested in a free test drive on the RV values give us a call for a login and password.
Have a great week! Ricky Beggs