LOS ANGELES — Westlake Financial Services reported that it experienced improvement in resale values last year, as the subprime auto finance company experienced a 30 percent year-over-year gain in values in 2010 after a flat 2009.
Westlake’s primary vehicle segment, 2000-2005 model years, has seen considerable pricing strength over the last 18 months, which the company attributed to limited supply, consumer downsizing, and a slow improvement in the economy.
The company said it improved its results last year through targeted buyer promotions and the introduction of its BWC Gold certification program, which spotlights select, later-model vehicles. This year also featured implementation of the company’s scoring model for evaluating auction performance. Official said the grading has helped identify and address performance issues, and compare results across its nationwide network of auctions.
In breaking down the year-over-year changes, Westlake saw a divergence between sedan and truck/SUV segments. While the truck and SUV prices began showing strong improvement in May ‘09, prices on sedans didn’t recover until the fall with the Cash for Clunkers program. Price increases on trucks and SUVs have slowed since the second quarter of 2010, while sedans prices have trended higher against the weaker comparisons.
“Heading into 2011, we expect prices on older used vehicles to remain strong despite a slowing rate of increase as the factors that have been moving the market for the last two years remain in place,” read a statement from a company press release. “Regionally, we expect to see particular strength in the mid-Atlantic and Midwest markets, as well as improving conditions in California. Only a shift in consumer behavior is likely to change this in the near-term but the backdrop of weak housing and labor markets, and still high consumer debt levels should inhibit any major shift toward new and near-new vehicles.”