The Big 3’s summer discounts has seen an influx of used-vehicle trade-ins, causing prices to fall, something dealers say could undermine the transition to value pricing. And used-vehicle inventories are only expected to grow when many fleet and rental cars return to market next month.

According to Automotive News, the reduction of cash rebates will be difficult with the values of late-model trade-ins, making it harder to bring sticker prices closer to transaction prices.

In many cases buyers owe far more than their trade-ins are worth. Dealers are now confronted with a possible struggle to close deals because they can’t pay down that difference with the big rebates they’re used to.

The report said that dealers have seen buyers leaving showrooms when faced with reduced values for their used vehicles. Sticker prices will fall and the amount customers can borrow will decrease, said Jesse Toprak, senior analyst at Edmunds.com.

The average wholesale price of used-vehicles in July fell 4.1 percent from the June. Large used SUVs shad an average sticker price of $13,702 in July – 8.7 percent lower than one year earlier.

0 Comments