It’s been an historic time for anyone working in fleet vehicle remarketing – prices have been dramatically high and market conditions have been changing with new digital technology and upstream channels. So what does 2013 look like for used vehicle values? Automotive News spoke with used car market expert Ricky Beggs, managing editor of Black Book, at the National Automobile Dealers Association convention, and here are a few of the points he made:
• Prices are likely to be under the levels they reached in 2011 and 2012. The main reason for that goes to supply and demand. The period of undersupply has been changing and moving toward oversupply and softening of the market. If you look at new vehicle sales volumes in recent years, it points the way to where the market’s going – it jumped from 12.7 million units sold in 2011 to 14.5 million in 2012; this year could reach 15.3 million units sold.
• Dealers have been complaining about used vehicle prices being too high, but they were still willing to bid at auction. They are still high on certain model ages – right now the average used 2007 to 2011 model cars is about $800 higher than comparably-aged models were a year ago. Beggs expects that in 2014, the total volume will create enough used inventory to ease the supply and demand situation.
• Trucks should do well in residual values because demand is increasing. That will be boosted by an improving economy and more demand for trucks in the service economy and construction.
• Entry level and subcompact cars may be uncertain – there’s a lot more models on the market than in the past, and consumers may not be ready until cars at that size until gasoline reaches $5 a gallon or higher.
