Black Book’s Ricky Beggs Forecasts Where Used Car Prices are Going

It’s been an his­toric time for any­one work­ing in fleet vehi­cle remar­ket­ing – prices have been dra­mat­i­cal­ly high and mar­ket con­di­tions have been chang­ing with new dig­i­tal tech­nol­o­gy and upstream chan­nels. So what does 2013 look like for used vehi­cle val­ues? Auto­mo­tive News spoke with used car mar­ket expert Ricky Beg­gs, man­ag­ing edi­tor of Black Book, at the Nation­al Auto­mo­bile Deal­ers Asso­ci­a­tion con­ven­tion, and here are a few of the points he made:

• Prices are like­ly to be under the lev­els they reached in 2011 and 2012. The main rea­son for that goes to sup­ply and demand. The peri­od of under­sup­ply has been chang­ing and mov­ing toward over­sup­ply and soft­en­ing of the mar­ket. If you look at new vehi­cle sales vol­umes in recent years, it points the way to where the market’s going – it jumped from 12.7 mil­lion units sold in 2011 to 14.5 mil­lion in 2012; this year could reach 15.3 mil­lion units sold.
• Deal­ers have been com­plain­ing about used vehi­cle prices being too high, but they were still will­ing to bid at auc­tion. They are still high on cer­tain mod­el ages – right now the aver­age used 2007 to 2011 mod­el cars is about $800 high­er than com­pa­ra­bly-aged mod­els were a year ago. Beg­gs expects that in 2014, the total vol­ume will cre­ate enough used inven­to­ry to ease the sup­ply and demand sit­u­a­tion.
• Trucks should do well in resid­ual val­ues because demand is increas­ing. That will be boost­ed by an improv­ing econ­o­my and more demand for trucks in the ser­vice econ­o­my and con­struc­tion.
• Entry lev­el and sub­com­pact cars may be uncer­tain – there’s a lot more mod­els on the mar­ket than in the past, and con­sumers may not be ready until cars at that size until gaso­line reach­es $5 a gal­lon or high­er.

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