In response to National Automobile Dealers Association’s chief economist Paul Taylor's comments, "Used Market Helping to Spur New-Car Growth" (Auto Remarketing Today, 12-3-10), I thought I would offer a bit of my own analysis. The increase in new vehicle sales is much easier to understand because the public buying decision has been so dumbed-down: $0 down $0 interest for as many months as you want! This alternative to fleet sales and endlessly evolving lease deals on the car makers part is very practical because "borrowing" sales now actually builds future availability of used product (Nissan Altima, Hyundai Sonata, and Honda Accord for example). And when these $179/mo models begin to come back to market, the very same marketers will already have in place a slightly different segment of new models at attractive discounted rates, there by repeating the cycle! Mr Taylor's analysis as a "shortage" in used vehicles should really have been branded as a shift in supply!
If prices are measured by book value on average, than you could say the market is about average . If you single out trucks, it quickly becomes a soft market. If you gauge small cars... try to guess what a Focus or Elantra will do! It may be mid-summer, and it has been hot... but not as hot as cars at auction! The auction business itself, as a whole, is in a rapid state of change and that has had more effect on prices than we give credit to. The shortage of cars crossing the blocks are still out there, but are selling through different channels . Finance companies sell direct. Rental companies have mature wholesale channels outside the auctions. OVE, AutoTrader, Cars.com... all outside channels that have syphoned vehicles out of auction lanes as well. I believe that these are major reasons as to why the "remaining" cars at auction have jumped to the levels they have. It has been the push away from the physical auction from the major consignments sources that has increased val...
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