Used-Car Inventories Drop While Prices Rise, CNW and KBB Report
Used-vehicle inventories on franchised and independent lots dropped 24 percent in March compared to the year-ago period, and hit their lowest level since June 2005, according to CNW Marketing Research.
Used-vehicle inventories on franchised and independent lots dropped 24 percent in March compared to the year-ago period, and hit their lowest level since June 2005, according to CNW Marketing Research.
The Bandon, Ore.-based research firm said the shortest supply was found in trucks, as SUVs and pickups experienced price increases at auction and retail.
Casual sales of SUVs and pickups also showed quick turnover, wrote CNW’s Art Spinella. He said the average time between the first offer on a private-party truck and its sale is 2.2 weeks, compared to more than eight weeks during the year-ago period.
The increase in used-vehicle sales is noticeable in states that were hit hard by the recession and mortgage crisis. “There are some significant hot spots around the country for used vehicles. Parts of Florida and California have seen used sales climb as much as 60 percent,” Spinella wrote.
There also was an increase in used-vehicle sales in Detroit, but Spinella attributed that to a collapse of new-car sales in a region that typically buys fresh from the factory through manufacturer plans.
As used-vehicle inventory continues to drop, used-vehicle prices continue to rise, according to CNW. Wholesale auction prices for full-size SUVs were up more than 12 percent, while retail prices were up 10.2 percent.
During the first 15 days of April, retail asking price rose 5.3 percent among franchised dealers and 6.5 percent among independent dealers. Actual selling prices were up 3 percent for franchised and 5.8 percent for independents.
Month-over-month actual selling prices increased 0.31 percent for franchised dealers and dropped 0.84 percent for independent dealers. However, CNW said the transaction prices don’t include F&I profit penetration, which increased for franchised and independent dealers by low double digits.
Used values increased 0.2 percent on average for the week ending April 16, which is the third consecutive week the rate of appreciation has declined, according to Kelley Blue Book’s Juan Flores, director of vehicle valuation.
“The appreciation in the marketplace has primarily been driven by the spring selling season and dealers chasing a limited supply of vehicles,” he said. “While the overall market may have cooled a bit, there still are a handful of segments that Kelley Blue Book expects will continue strengthening through the summer months. Values for subcompact and compact vehicles are expected to continue to rise, especially if gas prices creep up through summer.”
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