by Jon LeSage, remar¬≠ket¬≠ing edi¬≠tor, Auto¬≠mo¬≠tive Digest
Ricky Beg¬≠gs wants to know: Are low¬≠er gaso¬≠line prices caus¬≠ing small¬≠er used cars to see a big price drop? It could very well be‚Ä¶.. but it will take a few watch¬≠ful eyes to gauge the real impact.
Dur¬≠ing the sum¬≠mer and into the ear¬≠ly fall, Ricky Beg¬≠gs, Edi¬≠to¬≠r¬≠i¬≠al Direc¬≠tor at Black Book, was notic¬≠ing that the typ¬≠i¬≠cal gas-price-to-small-car used vehi¬≠cle val¬≠ue ratio was off kil¬≠ter. Gaso¬≠line prices were creep¬≠ing back up, but whole¬≠sale prices were stronger than usu¬≠al for small¬≠er cars.
Now it‚Äôs look¬≠ing to fall in line with more typ¬≠i¬≠cal remar¬≠ket¬≠ing pat¬≠terns. Black Book just report¬≠ed that Entry-Lev¬≠el Cars have depre¬≠ci¬≠at¬≠ed -16.6% over the past year, and Entry Mid-Size Cars have dropped -16.9% dur¬≠ing that same time.
These have been the largest change lev¬≠els of all car and truck seg¬≠ments. Typ¬≠i¬≠cal Entry-Lev¬≠el Cars are the Hon¬≠da Fit, Hyundai Accent, and Chevro¬≠let Aveo. Exam¬≠ples of Entry Mid-Size Cars include Volk¬≠swa¬≠gen Jet¬≠ta, Chevro¬≠let Mal¬≠ibu, and Chrysler Sebring.
As for gas prices over the past year, they‚Äôve dropped from a high of $3.78 on Feb¬≠ru¬≠ary 25 to a cur¬≠rent lev¬≠el of about $3.29.
To give you a look at the over¬≠all mar¬≠ket dur¬≠ing this time frame, the aver¬≠age depre¬≠ci¬≠at¬≠ed since a year ago is -11.8%. Full-Size Pick¬≠up Trucks have seen the best per¬≠for¬≠mance with dep¬≠re¬≠ca¬≠tion at -4.4%.
Black Book will be fol¬≠low¬≠ing the trend to see if there‚Äôs a direct reflec¬≠tion on gas and used car prices. Is it more of a sup¬≠ply and demand issue, and what will it look like in 2014?
‚ÄúThe depre¬≠ci¬≠a¬≠tion lev¬≠els for Entry-Lev¬≠el Cars and Entry Mid-Size Cars are aver¬≠age in com¬≠par¬≠i¬≠son against pre-reces¬≠sion-lev¬≠el price changes, but it‚Äôs still some¬≠thing to keep a watch¬≠ful eye on when you com¬≠pare with the rest of today‚Äôs seg¬≠ment activ¬≠i¬≠ty,‚ÄĚ Beg¬≠gs said.