The numbers out of the used wholesale activity during the past week seem to have indicated hesitancy in the buyers to build retail inventory from the auction lanes. Or maybe it is the sellers, through holding onto some strong floors, which might be holding back better sales conversions and possible increasing prices.
Ricky Beggs, VP and managing editor for Black Book takes a closer look at the results of the data from the past week. "Through many auction reports from the Black Book editors and survey personnel, the primary comment reflects around the strong number of no sales. If there was a more positive reflection it was focused on the slightly older cars that get a little extra attention during 'tax time' and also the interest in the really clean condition cars having better sales conversion rates."
It was a very active week in the number of vehicles that required an adjustment. At 2,462 vehicles adjusted each day throughout the week, this was the largest number since the week ending September 14, 2012. Another indication in the level of change was that 19 of 24 segment types had more than 50 percent of their models with a change. The Mid-size Pickups (MPT) and the Compact Pickups Trucks (CPT) came in with 93 percent and 70 percent of their models with changes. With this many models being adjusted we see plenty of interest, but at different values than previously sold and published.
The primary adjustments are decreases in value as 13 of the 24 segments had 40 percent or more of their vehicles being decreases. These were led by the Prestige Luxury Cars (PLC) at 60 percent and an average declining adjustment of -$334. Overall the cars had an average segment change of -$64, the largest weekly declining average since the week ending November 30, 2012. When looking at the car segments, four different individual segment types retained values in a dollar level better than the total car segment average every week for the past quarter of time. The types ranged from the Compact Cars (SCC) to the Full-size Cars (FSC) as well as the Entry Level Cars (ELC) and the Entry Mid-size Cars (EMC).
The trucks continue to show more stability than the cars. This past week the change at -$28 was slightly better than the previous weekly change of -$36. Four segments increased for the week as compared to only 2 increasing segments for both of the first two weeks of the year. The strength continues for the Cargo and Passenger versions of the Full-size Vans and was joined by the increases in the Cargo Minivans (MVC), which is a small volume segment, and the Compact Pickups (CPT).
"Within the market, the Editors have now captured enough auction data to report the initial market driven values for another 12 models this past week. The Black Book Internet Suite Weekly Adjustment Report helps you easily identify these models," Beggs noted.
Most years the activity and values show increases for this time of the year, according to Beggs. "Even though that is not the case so far this year, we do not feel this is a cause of concern or an indication of a year-long weak used car market. The strength in value retention during December was above the norm, creating a stronger starting point than normal and giving us a chance to ease into the new year," he said.