BLACK BOOK:WHOLESALE MARKET APPEARS BRIGHTER

By Joe Overby, Staff WriterFebruary 16, 2009
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GAINESVILLE, Ga. — As it has been the case for much of 2009, auction activity and prices continued to improve over the past week. Ricky Beggs, Black Book's vice president and managing editor, suggested this wholesale upswing can be boiled down to vehicle supply. "With limited trade-ins at retail lots and franchise dealers, there just aren't enough vehicles to go around," he explained in his latest Beggs on the Market video report. "And for someone who needs a used car, the availability of vehicle falls back on the auctions." In other words, as auctions become the most viable source for dealers to find used inventory, this has driven up wholesale prices and activity. Breaking auction prices down further, Beggs noted that nine of the 14 truck segments that Black Book tracks showed increases in value over the last week. Moreover, for the eighth consecutive week, full-size trucks and full-size SUVs have shown improvement, as well. On the car side of the market, just two of the 10 segments climbed in value. "Although the changes aren't as great, the only segment that really (saw) an increase in how much it went down was the premium luxury car," Beggs pointed out. "Other than that, the car segments stayed pretty stable, as well, from last week to this week." Moving on, Beggs also said he talked with more dealers than usual this week in order to provide a more detailed look at how the retail side of the market is performing. And apparently, conditions are improving there, as well. "Most are saying that there is a little more traffic on the lots and that's a good sign," he noted. "They're also saying that the availability of credit continues to get just a little better each week, with some of the lending sources lowering their credit scores. "And some of the factors involved in making that decision (to lower credit-score requirements) makes it a little easier for that retail customer to get that loan approved," Beggs continued. "This kind of supports why there's more activity at the auction lanes and that activity continues to be very strong."