On the heels of an auction expert's report that wholesale prices have firmed, CNW Research said in its January newsletter that retail used-vehicle prices continue to rise.
Not long after auction expert Tom Kontos reported on Jan. 2 that wholesale prices were stabilizing, CNW reported that both franchised and independent dealers increased their asking prices 3 percent for the first 15 days of January vs. December 2008.
Actual transaction prices were up 7.2 percent for franchised dealers, and 3.6 percent for independent dealers.
"Franchised dealers were able to squeeze a slight 0.68 percent increase in actual transaction prices vs. a year ago, while independents suffered a 6.6 percent decline," wrote CNW’s Art Spinella.
In terms of unit sales, the industry is similarly looking a bit brighter, but in some cases only because the rate of decline isn't as bad as it was, Spinella added.
For the first 15 days of January, franchised dealers were slightly up at a rate that would put the month at 678,000 units. Independents were down 13 percent to 556,300 units.
Private party sales are similarly trailing the year-ago rate and are likely to decline 10 percent this month, as there are few sources of credit on private party sales, according to CNW.
"All in all, even in the dimness of the current economy, the outlook is actually improved," wrote Spinella. "Prices are clearly firming up at both wholesale and retail. Demand is somewhat higher and floor traffic appears to have bottomed out on the CNW Used Car Index. Additionally, used-car buyers tend to need a vehicle and can’t postpone for as long as new-car tenders."