Black Book Carefully Watching Gasoline-to-Small-Used-Car Price Ratio

by Jon LeSage, remar­ket­ing edi­tor, Auto­mo­tive Digest

Ricky Beg­gs wants to know: Are low­er gaso­line prices caus­ing small­er used cars to see a big price drop? It could very well be….. but it will take a few watch­ful eyes to gauge the real impact.

Dur­ing the sum­mer and into the ear­ly fall, Ricky Beg­gs, Edi­to­r­i­al Direc­tor at Black Book, was notic­ing that the typ­i­cal gas-price-to-small-car used vehi­cle val­ue ratio was off kil­ter. Gaso­line prices were creep­ing back up, but whole­sale prices were stronger than usu­al for small­er cars.

Now it’s look­ing to fall in line with more typ­i­cal remar­ket­ing pat­terns. Black Book just report­ed that Entry-Lev­el Cars have depre­ci­at­ed -16.6% over the past year, and Entry Mid-Size Cars have dropped -16.9% dur­ing that same time.

These have been the largest change lev­els of all car and truck seg­ments. Typ­i­cal Entry-Lev­el Cars are the Hon­da Fit, Hyundai Accent, and Chevro­let Aveo. Exam­ples of Entry Mid-Size Cars include Volk­swa­gen Jet­ta, Chevro­let Mal­ibu, and Chrysler Sebring.

As for gas prices over the past year, they’ve dropped from a high of $3.78 on Feb­ru­ary 25 to a cur­rent lev­el of about $3.29.

To give you a look at the over­all mar­ket dur­ing this time frame, the aver­age depre­ci­at­ed since a year ago is -11.8%. Full-Size Pick­up Trucks have seen the best per­for­mance with dep­re­ca­tion at -4.4%.

Black Book will be fol­low­ing the trend to see if there’s a direct reflec­tion on gas and used car prices. Is it more of a sup­ply 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.

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