Dealers are banking on the hope consumers aren’t using their federal tax refunds any place other than their store to make a vehicle purchase.
The latest Black Book Market Insights report showed continued spring season momentum for cars such as sub-compacts and midsize models. And even though compact cars and full-size cars declined, editors emphasized the price drops were minimal.
Furthermore, the report touched on the specialty markets and discussed where incentives have fallen as of late, which could be a positive sign for residuals.
But now that we’re one week into March, the spring market appears to be in full swing.
“It was a great week for lower-priced mainstream brand vehicles as tax season buying continues with active bidding in the auction lanes,” said Anil Goyal, Black Book’s executive vice president of operations.
Volume-weighted, editors determined overall car segment values declined by only 0.10 percent last week. In comparison, the market values had decreased on average by 0.24 percent per week during the previous four weeks.
Within cars, Black Book noticed the sub-compact and midsize car segments performed the best, with values increasing by 0.21 percent and 0.11 percent, respectively last week.
Again looking at volume-weighted information, editors determined overall truck segment values — including pickups, SUVs and vans decreased by 0.19 percent last week, lower than the average decrease of 0.37 percent per week mentioned during the previous four weeks.
Among trucks, Black Book pointed out the compact crossover/SUV and compact van segments performed the best with values holding steady last week.
Black Book’s lane watchers who attend about 60 sales each week incorporated some specific financial figures when recapping what they noticed at the auction.
Beginning in Georgia, the observer mentioned, “Vehicles in the $30,000 range were not receiving bids, but the units around $12,000 or less were in demand, and most sold. The dealer lanes seemed to depend on the seller as some held to their floors while others were willing to negotiate the selling price.”
Meanwhile, up in Massachusetts, Black Book’s representative shared, “A franchise dealer reported that January and February were not particularly good, but he received lots of action on vehicles under $10,000.”
Elsewhere, talk about price floors and the spring market filled the bidding areas and cafeterias, including:
— From Wisconsin: “Almost all of the consigned vehicles, whether commercial or dealer owned, only sold if the floor was met, so the sold percentages were just ok.”
— From California: “We had a good sale with active bidding both from the auction floor and via the internet.”
— From Pennsylvania: “There was good activity today, which was indicative of the approaching spring market or the fact that the condition of the vehicles seemed to be better. Either way we had a good sale.”
As mentioned previously, editors also used this report to provide their monthly look at other portions of the wholesale world. Here is what they shared:
— Collectibles: Black Book explained that, “what started out as a national caliber Concours d’Elegance 23 years ago has turned into one of the top three collectible vehicle events in the United States, joining Pebble Beach/Monterey and Scottsdale to become the reigning collectible car triumvirate.”
— Recreational vehicles: For the second month in a row, editors indicated the values of RVs sold at auction, including motorized and towable, were very stable, with changes of less than 2 percent.
— Powersports: Black Book put this segment this way: “The old saying, ‘In like a lion, out like a lamb’ refers to typical March weather, but the first half of that phrase could just as well refer to a few segments in the powersports market this month.”
— Heavy Duty: Editors found that February ended in a similar fashion as January with strong used wholesale values. “This trend includes some commercial trailers; in fact, many dry vans and reefers appreciated in value,” editors said.
— Medium Duty: Overall, Black Book explained the medium duty market stabilized during the last couple of months of 201, and that trend continued for the first part of 2018. “Reports are indicating that truck orders are up on almost all truck classes, but the increase in inventory will not necessarily have a negative impact on the future market,” editors added.