From The Lanes

More Thoughts From Ricky Beggs, VP, Managing Editor

There are two types of questions I often get regarding the used car market. One deals with what just happened and why those values and trends occurred. The other, that everyone wishes they had a sure answer for, what is going to happen.

2009 was a unique year in the used market with many models and segment types having a strong year-over-year position. This occurred in a time when the overall economy was hard to deal with, and while overcoming the difficulties of decreased consumer interest in big ticket spending. It is a similar relationship to the farmer and the weather. No matter how hard he/she worked and planned his farming efforts, there are some things he/she just can’t control or do anything about.

Values in the used market were on an overall consistent climb throughout 2009. What we must remember is the starting point at the beginning of 2009. Due to the high price of gas and diesel throughout most of 2008, values of SUVs and trucks depreciated at unprecedented levels throughout 2008. Thus for 2009, there was only one way for values to go, up. As we finished September and October of 2009, there were quite a few 2006-2008 models that, even though they had more mileage on them, were bringing 22-24% more than they did in the did in the fall of 2008.

To make room for the new model year to hit the used market, the final 8-10 weeks of 2009 brought forth a market readjustment. With auction volumes and sales percentage conversion rates easing up toward the end of the year, values overall were relatively stable.

Well, now you see the market as we see it through the rearview mirror. With the headlights on hi-beam, Black Book is primed for a very solid and positive 2010. Here’s what’s in store.

Various factors will drive a positive and strong 2010 used market. The first relates to a below-demand supply of used vehicles. Used car availability remains limited due to fewer trade-ins from another year of sub-12 million new car sales, and fewer rental car returns. The next criteria helping the market improve relates to an easing of, and more access to, affordable consumer credit.

Through the second half of 2009, I previously mentioned several 2-4 year old vehicles being worth 22-24 % more than they were in 2008, despite being a year older and having more miles on the odometer. We still feel like 2010 will bring solid values and below-normal annual depreciation. But please don’t be confused when values don’t appreciate this year like they did in 2009, when we saw year over year increases. The market will still be good, barring any catastrophic issues or unforeseen large increases in gas prices.

You can pick up our detailed insights into the Daily and Weekly market trends by following us on Twitter @BeggsBlackBook, and also through our weekly Beggs On The Used Car Market video series available at www.BlackBookUSA.com. Thank you for choosing Black Book, and we wish you a prosperous 2010.

For timely updates on the industry, please view the weekly ‘Beggs on the Market’ videos posted at www.BlackBookUSA.com. Follow us on Twitter and stay updated on important market changes as they’re happening. As always, our editors and survey personnel look forward to seeing you on the auction lanes.