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Retail Used Transaction Prices Climb, Independents Multiply

July 21, 2009

BANDON, Ore. — An influx of new, independent dealerships could help used-car sales reach four million units in 2009, according to CNW Research.

The Bandon, Ore.-based research firm found that after the first 15 days of July, sales of used vehicles increased 6.2 percent, or 3.9 million vehicles, compared to the year-ago period.

The improvement in used-vehicle sales is due to an influx of new, independent dealerships which recorded a 16.4 percent surge in volume compared to the year-ago period. Franchised dealers achieved a modest improvement of 2.7 percent in sales, while private sales decreased by 0.2 percent.

Independent dealers increased year-to-date sales by 3.9 percent, or 7.2 million units, while franchised dealers boosted overall sales by 3.1 percent, or 7.8 million units. Private party sales fell sharply by 10.9 percent, or 6.2 million units. Overall, used-vehicle sales totaled 21.3 million units, a drop of 1.2 percent compared to the year-ago period.

The improvement in used-car sales is partly due to the closures of franchised dealerships.

“Some of the smaller GM and Chrysler stores have reconfigured themselves as used-car outlets. Simultaneously, franchised dealership salespeople and managers cut during the past year for lack of new-car sales have launched their own independent stores,” wrote CNW’s Art Spinella.

The improvement of used-car sales at franchised and independent dealers coincides with an increase in retail transaction prices. During the first half of July, the average retail price for used cars from franchised dealerships was $10,160, a 9 percent increase from the $9,318 recorded in the year-ago period, and a modest 0.63 percent gain over June.

Average retail prices for a used-vehicle at independent dealerships reached $8,188 in July, a 5.03 percent increase from the $7,796 recorded in the year-ago period, and a nearly 1 percent improvement over June.

“With pent-up demand putting future buyers in the vault, and credit trickling back for private party sales, the industry remains on track to a near 40-million unit year,” Spinella wrote. “While a long way from the volumes registered since 2000, it is clearly a marked improvement from the 36 million of 2008.”

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