As it nears 90 today, my youngest son and I are in the office organizing things and trying to stay cool. He's patient with me and really just wants to go to Verizon for a tour of the new phone he has his eye on. I leave my phone turned off on Sundays to keep my mind at work with out that device.
I am deliberating how to adjust my company fee structure and wrestle with making a slight increase. We are starting our eleventh year in business and have never increased our prices... yet all around me auction fees are increasing steadily. My expense structure is fairly flat, but costs such as Autoniq (NADA, Black Book, AutoCheck, and Carfax) are increasing. Verizon... the amount of data we use on the hand held devices... is also increasing and the two combined are justification for making the change to our fee. It's a growing pain more than anything, and for that I am pleased.
Going on in to the remainder of July and peeking at August, only a continued weakness in retail sales will move the auction index down. In spite of slow sales and lower demand, the auction market is fairly firm. The oldest, highest mileage wholesale units are soft, but trucks and mid-size SUV's are strong. Optimism abounds with car guys, but the sting of June is still there and July presents the vacation challenge. We will see how this next week goes, but I forecast lower dealer participation at the block until retail improves###
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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