The outlook for the 2020 used market is positive, at least according to three remarketers from three fleet management companies.
Brian Garner, manager, ARI Remarketing Solutions; Jeff Krogen, assistant vice president of fleet strategy for Enterprise Fleet Management; and John Wuich, vice president strategic consulting services at Donlen provided their insight.
Garner said that he and his team expect the used market to continue to be mostly healthy in 2020, but he does predict a slight downturn compared to 2019.
“The usual spring market upturn we’ve been used to will also be flatter and not as pronounced. Full-size SUVs and crossovers will continue to slide due to the saturation in the market,” he said. “Large trucks, Class 7 and Class 8 will go in the gutter because there’s just a saturation of them and the market can’t keep up.”
One trend that will continue to gain prominence next year and in the following years is online remarketing.
Wuich noted that online and direct dealer sales were a greater part of his company’s remarketing efforts in 2019. As online remarketing continues to grow in his efforts, and throughout the industry, he expects increasingly detailed condition reports and higher emphasis on vehicle imaging.
Krogen also saw the strength of online remarketing as a sales channel in 2019. One of the biggest benefits that online sales offer, he noted, is the ability to reach buyers outside of traditional office hours.
Another trend will be safety features, such as advanced driver assistance systems, within vehicles becoming a bigger priority for remarketers. If the vehicles are equipped with these types of technology, it will become that much more important for remarketers to identify the features and ensure they’re in working order among the vehicles they’re selling, noted Wuich.
Electric vehicles are also poised to become a larger part of the automotive business, so Wuich added that he and his team will be watching how well EVs hold their residual values.
“With EVs, depreciation expense is a larger share of the total cost pie,” said Wuich. “It will be interesting to see if EVs continue to close the gap on residual percentage.”
Shorter replacement cycles are also expected in 2020, if the resale market continues to be as healthy as it has been in the last several years.
One thing that’s been on everyone’s mind and will continue to be a point of concern next year, is the impending recession. Garner noted that many in the industry feel like a recession is due anytime now, so it’s something that the industry will need to keep an eye on.