Bankruptcy

Used Car Prices Drop

By J. Michael McBride

Here is a link to a Business Week article with a fairly lengthy explanation of the drop in the used car market, which particularly discusses the used truck market. One “take away” from this article is that the correction we are now seeing may be too strong and it may thus be a good time to buy a used truck. The second point I would add is that this varies strongly by region, with the Fort Worth gas boom keeping prices on cars and trucks higher than average—for example.

Quote:

"I've never seen anything like it, where segments have fallen as much as they have and as quick as they have," says Ricky Beggs, vice-president and managing editor of Black Book, a widely used industry benchmark for trade-in prices and used-car auction data.

For instance, according to Black Book data, the average trade-in value of a 2006 Chevrolet Tahoe, once one of General Motors' (GM) top sellers, has fallen around 29%, or more than $6,000, since March. The Tahoe is a full-size SUV that also comes in a hybrid version.

Wholesale auction prices for used, full-size SUVs averaged $10,507 in June, according to Carmel (Ind.)-based Adesa, a used-vehicle auction company. That was down an average of $3,167, or 23.2%, vs. the year-ago month. Full-size pickups were down $3,203, or 27.3%, to $8,513, Adesa said. The fall in price for some individual models is much greater than the Adesa average.

Here is the link to the whole article:
http://www.businessweek.com/lifestyle/content/jul2008/bw20080725_510059.htm

Michael

Full post as published by Texas Lawyer Blog on July 29, 2008 (boomark / email).