Black Book Says Super Storm Sandy’s Effects Boosting Used Car Price Retention
GAINESVILLE, GA – Price drops for a number of used-vehicle segments are starting to slow as higher demand for vehicles in the wake of hurricane Sandy is starting to kick in, according to Black Book. The company said that auction activity from as far away as Texas attributed rising sales levels to the need for replacement vehicles.
Beggs said early estimates as to the number of vehicles damaged or destroyed are around 200,000.
“Again, these are early estimates and there is a good chance this number will grow as the weeks continue to unfold,” Beggs said.
He said that the increase in demand will probably hold through the December.
“Our initial thoughts were that values and interest would be noticed over about the eastern half of the country,” said Black Book’s Senior Analyst Ricky Beggs. “From comments made by a dealer in Texas just over a week ago where cars were being loaded on a couple of carriers and heading to New England, by Tuesday morning of last week the uptick in activity, sales conversion rates and even a bump in values from some sellers began showing in the market, at some but not all auctions. I even had one captive finance company ask me where I would suggest they move some cars to in order to best meet the market demands.”
The segments that saw the lowest price drops, since the week of July 6, were cars, at a drop of 0.2% for the week of Nov. 12 - 16. Four segments declined $30 or less as well. They included entry mid-size Cars, compact cars, full-size cars, and entry-level cars. Beggs added that for the first time since August, no single car segment type saw a drop of more than $100.
“The average segment change within the car models this past week came in at -$43, the smallest change since the -$37 decline the week ending July 6, 2012,” Beggs said.
Truck categories also saw reduced depreciation during the week of Nov. 12 - 16 compared to the previous three. The segments included mid-size pickup trucks, mid-size SUVs, and luxury SUVs.
“Where the trucks had been the better retention market for all but two weeks since the week ending July 27, the -$65 change this past week is a slight improvement in depreciation and the smallest declining amount over the past 3 weeks,” Beggs said. “Still with a pretty significant decline was the full-size crossover segment at -$131, while the best retention in the truck group was the mid-size pickup segment at -$38.”
By Greg Basich