The Car and Truck Fleet and Leasing Management Magazine

Wholesale Market is Slow & Residuals are Off for High-Mile Units

October 9, 2001

Resale values for intermediate-size fleet sedans are down, on average, 15 percent, and the forecast for the winter market is even bleaker, said Scott Webber, director of vehicle remarketing for AMI Leasing, a fleet management company headquartered in Worcester. “It’s pretty tough out there,” said Webber. A number of factors are contributing to the decline in resale values. One is supply and demand. “There is a flood of high-mileage cars in the market,” said Webber. “The market isn’t there for the residuals that were quoted three to four years ago.” What’s selling are low-mileage cars and SUVs. “Dealers are fighting over these units.” Also hot are pickups and cargo vans, with or without miles, said Webber. However, 15-passenger vans are selling very slowly and there is a greater-than-normal inventory of these units. The primary reason is that universities and church groups have curtailed purchasing them, both new and used, due to rollover allegations. Another factor contributing to the slower sales in the wholesale market is lower dealer attendance. “At some of the recent sales I’ve attended the dealer crowds start thinning out in the afternoon when the dealer trades and fleet/lease sales were about to take place,” said Webber. One reason is that fewer out-of-town dealers are flying to attend auctions. “At most sales, you’re primarily getting local dealer attendance. It is the out-of-town buyers who tend to bring the market up when they attend,” he said. The slowdown in the wholesale market appears to be nationwide. “Right now, there isn’t any geo-graphic area that’s stronger than another,” said Webber.
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