The Car and Truck Fleet and Leasing Management Magazine

Resale Improves as Used-Vehicle Supply Decreases By Mike Antich

October 02, 2003

A reduced inventory of used vehicles in the wholesale market has helped to stabilize resale values, contributing to four consecutive months of improved prices from June to September. The strongest markets are in the Midwest and South, while the weakest is in the Northeast due to the region’s ongoing high inventory of used vehicles.

“Resale prices for most fleet vehicle segments are now stable with the exception of minivans, whose prices continue to remain soft,” said Frank Grochal, vice president of used vehicle sales for ARI, a fleet management company headquartered in Mt. Laurel, N.J. “The problem is that there are just too many minivans in the wholesale market. We are still working with the sell-off of the massive number of units that went into service three and four years earlier.”

Likewise, SUV resale prices have been fluctuating in parallel with the gyrating market supply of used units. “For example, there will be a glut of SUVs one month softening resale prices, then dealers will move them creating a need for additional inventory, which will increase prices at auction due to stronger dealer demand,” said Grochal.

The vehicle segment performing the best in the wholesale market is full-size vans, which continue to be in strong demand in the secondary buyers’ market. However, resale values are soft for most work trucks except for those models with high level trim packages.

Dealer demand for intermediate-sized four-door fleet sedans continues to be steady, which is helping to keep resale values stable.

Grochal predicts that the flat wholesale market experienced in 2003 will continue into the 2004 calendar year. “A lot hinges on the auto manufacturers and the decisions they make in regards to incentives, rebates, and financing of new vehicles, which directly influence resale prices,” said Grochal.

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