Last updated Tuesday, May 29, 2007
Were it not for the rising cost of fuel we might simply say “ditto”. The market continues to be dominated by a scarcity of good product and continues to be relatively stable in most segments. This is not to say that there isn’t some erosion occurring, but that what erosion there is is normal for this time of year and steady rather than abrupt.
Domestic cars have held up quite well generally over the last several months. They are certainly cheap compared to their import brethren and a good number of them populate that very active $7,000-$10,000 price range. Those imports above that price level have dropped considerably over the same time span and are likely to continue to do so over the summer. Even the more popular Japanese cars have declined steadily over the past few books, dropping at about twice the rate of the domestics. European luxury cars have declined steadily as well but not in the sort of freefall they experienced much of last year.
High fuel prices have once again coincided with the beginning of summer (what a surprise) and we are experiencing some serious resistance in the medium and full-size SUV segments, though not to the extent we saw last summer. Even though gas prices are at an all-time high, we have not yet had the kind of panic response we experienced last year. But prices in those segments have come down a lot and will probably continue to do so throughout the summer. Full size pickups have suffered as well. Diesels are seemingly immune and, along with hybrids (both cars and trucks), appear to have stopped what was becoming a steady decline and have firmed up considerably.
Smaller fuel efficient cars and trucks have, of course, become increasingly desirable and are holding steady or increasing in value.
Sport coupes and convertibles are experiencing typical summer erosion already and will probably decline steadily as well over the summer.