Resale Prices in Wholesale Market Continue to be Soft
A mid-winter price rally in the wholesale market has raised resale prices moderately; however, only back to levels seen in late fall 2002. For instance, resale values for three-year-old intermediate-size sedans were down approximately 6-8 percent compared to same time last year, said Peter Klopchic, vice president, vehicle remarketing for CitiCapital Fleet, a fleet management company headquartered in Carrollton, TX. “When compared to two years ago, resale prices for intermediates are down even further, by almost 15-16 percent,” added Klopchic.
Resale values for minivans were also hit hard, continuing a two-year period of soft prices. “The rule of thumb in the wholesale market is that what sells well new will sell well used,” said Klopchic. “Minivans are not selling well new. Consumers are shying away from them and buying SUVs instead,” added Klopchic.
Also soft are resale values for luxury vehicles. “These vehicles have been particularly hard hit by zero-percent financing and the soft economy, which has caused some people to be nervous about their jobs,” said Klopchic. However, this is not a new trend. Resale values for luxury vehicles have been soft since the summer of 2001.
One bright spot in today’s wholesale market is pickup trucks, which continue to experience strong dealer demand and solid prices. Although not as strong as pickups, SUV prices have remained stable. However, some models, such as the Explorer, have high inventories in the wholesale market and are experiencing a softening of demand. “I used to call SUVs the ‘fins’ of the ’90s,” said Klopchic. “But we are now three years into the new millennium and consumers have not tired of SUVs. The new generation of SUVs, built on car platforms, have an improved ride and better fuel economy.”
– Mike Antich