by Jon LeSage, editor, Used Car Market Reports
Here’s some thoughts on used car prices from this week’s Used Car Market Reports….
There’s a consensus emerging that prices will be softening later this year due to off-lease returns and from other sources.
Kelley Blue Book would agree with Tom Kontos on that one.
The market had been tightened up partially by Cash for Clunkers removing old models; the earthquake/tsunami supply disruption in Japan on the new side; and that vehicles are well made these days and owners are holding them longer.
That looks like it will be changing; however, it should be considered from a big picture vantage point – prices might drop but still be fairly high.
And there are other elements of profitable used car sales for dealers – keeping the volumes high, certified pre-owned programs, finding the right used cars for their specific market, extended service contracts, and looking into aftermarket offerings.
As for right now, used prices are strong – Art Spinella reported that used transaction prices are high, especially for independent dealers; Jonathan Banks, in his video, said that strong new vehicle demand supporting high prices continued to be a boom for used price performance.
Another interesting development was that International Automotive Remarketers Alliance’s (IARA) standards committee has drafted a template to help financial institutions comply with rules being set by the Consumer Financial Protection Bureau.
The committee hopes to receive endorsement from IARA and National Auto Auction Association. The proposal addresses computer data security, access to accounting and inventory, how customer data are backed up, employee hiring and background checks, and other issues.
