ADESA analyst Tom Kontos blames employee discounts for falling used-car values, especially across traditional Big-3 car lines. Kontos says average auction prices have dropped 6.3% since May, with full-size SUVs taking the biggest hit.
The glut of used cars from trade-ins make luxury prices more attractive than ever. Most of the price pressure is on domestic models, but dealers are also discounting import models to keep pace.
The standard reimbursement rate of 40.5 cents per mile is not keeping pace with soaring gasoline prices, insurance bills, and maintenance costs.