Post and Courier
August 1, 2014

Spring Stable: Respected auto researcher Black Book foresees leveling off of used-car-value declines heading into busy buying season

Posted: 03/22/2014 12:01 a.m.


By Jim Parker

It's a rite of spring: car shoppers employing tax refund checks to buy a much needed, or eagerly desired, car or truck.

In many cases, those purchases involve used cars. New vehicle prices tend to outstrip even the weightiest government paybacks.

Yet even with pre-owned vehicles, a big question facing shoppers involves price. New vehicles tend to be well-publicized in terms of values, typically displaying the manufacturer's suggested retail price, or sticker price, on new-car dealership lots. There are outside sources, too, such as estimates set by auto buying information companies.

Determining used car values can be somewhat murkier, since they don't have MSRPs. But again, there's plenty of consumer information out there.

Black Book, launched 59 years ago, stands as one of the longest-lasting information and pricing services. Kelley Blue Book is the veteran of the field, dating to the 1920s. And the North American Dealers Association has a host of NADA pricing guides.

Black Book specializes in determining used-vehicle wholesale prices, daily gathering information from places such as car auctions.

A recent report focuses on average depreciation for February, a transitional month that can prove a bellwether for the spring shopping surge.

According to Black Book, used vehicles in model years 2008-2012 depreciated -1.1 percent in February, "showing stronger seasonal retention" than the -1.9 percent rate a month before.

By types, domestic car depreciation was -0.6 percent; import cars, -1.1 percent; domestic trucks, no change; and import trucks, -1.5 percent.

Black Book expects depreciation for all of 2014 to be -13.5 percent.

"We're beginning to feel the first true effects of the springtime tax buying season through the stronger monthly retention levels in February compared with January," said Ricky Beggs, editorial director of Black Book.

"We will keep a watchful eye on the continued winter weather patterns, growing supply and off-lease activity, all of which could have near-term effects on the spring buying season," he said.

The Black Book report also detailed used-car-value declines by vehicle segment.

Full-size passenger vans stood out as the strongest segment in retaining value in February, with just an -0.2 percent depreciation rate. Full-size cars topped the car segment at -0.4 percent.

Year to year, full-size passenger vans posted an average wholesale value of $12,774 as of February, -13.2 percent from the same period of 2013 when prices were $14,711.

According to Black Book, vehicles in the segment include the 2500 series Sprinter vans, which were badged as Dodges until a few years ago. They now sell under the Mercedes-Benz banner. Ford E150 vans and GMC G-series vans are also in the category.

Full-size cars finished the month with a $12,841 wholesale price, or -15.9 percent depreciation from last year's $15,265 value.

The Toyota Avalon, Buick Lucerne, Nissan Maxima, Ford Taurus and Chrysler 300 are among the vehicles that fit the class.

And, the steepest monthly depreciation for the second straight month proved to be cargo minivans at -3.4 percent. The vehicles showed -17.2 percent depreciation for the year and a wholesale value of $9,068.

Vehicles in this segment include the Dodge Caravan and Chevrolet Uplander, according to Black Book.

All of these models can be purchased in greater Charleston through new car and used car dealerships.

Meanwhile, the highest 12-month depreciation took place with entry level cars, -17.8 percent; entry mid-size cars, -17.4 percent; and prestige luxury cars, tied with cargo minivans at -17.2 percent.

Least depreciating were full size pickups, -6.9 percent; compact SUVs, -7 percent and compact pickups, -7.3 percent.

Black Book describes itself as a "timely, independent and accurate" distributor of vehicle pricing information. The company said it has "continuously evolved" to meet customer needs. Black Book figures are published daily by National Auto Research, a division of Hearst Business media. It has offices in Georgia, Florida, and Maryland.

According to credit union auto lending website www.cudlautosmart.com, Black Book since 1955 has published a guidebook for consumers to quickly find the latest wholesale prices direct from auto auctions. Used vehicle prices displayed in Black Book are updated within 10 days of an auction.

For more information, visit www.BlackBookAuto.com or call 800-554-1026.

Reach Jim Parker at 937-5542 or jparker@postandcourier.com.