Used Auto Market Uproar
Used vehicle prices are continuing to outpace the economy as numerous factors influence the volatile industry. This article from Manheim Consulting gives a detailed look at the market's current status and details some of the trends and influences.
As new vehicle prices continue to rise and inventories are squeezed, the impact on the used market is a higher demand. Unfortunately the supply of used vehicles is still limited as fewer fleets are currently replacing inventories due to decreased business spending. Combined with the trend toward more fuel efficient vehicles, the small to midsize segment is seeing unprecedented price increases in year-over-last comparisons.
As usual I look at what this means to a fleet manager. It could be a great opportunity to take advantage of high returns if you have some budget money to allocate this year. Small to midsize vehicles are garnering top dollar at auction, and can be replaced with fairly readily available models from the domestic manufacturers. Since most fleet incentives are set for the year, there should be a lower incremental increase to replace these vehicles than is apparent on the retail market. I also think this is a good year to pass on more than minimal truck improvements as we wait to see what the upcoming regulatory changes will be to CSA regulations.
Bottom line: my advice is to look at replacing small to midsize vehicles and take advantage of the return on your sale of assets due to the inflated market. If you have a mixed fleet with medium or heavy duty vehicles, wait for later in the year incentives or for your next budget cycle to look at those assets.
As new vehicle prices continue to rise and inventories are squeezed, the impact on the used market is a higher demand. Unfortunately the supply of used vehicles is still limited as fewer fleets are currently replacing inventories due to decreased business spending. Combined with the trend toward more fuel efficient vehicles, the small to midsize segment is seeing unprecedented price increases in year-over-last comparisons.
As usual I look at what this means to a fleet manager. It could be a great opportunity to take advantage of high returns if you have some budget money to allocate this year. Small to midsize vehicles are garnering top dollar at auction, and can be replaced with fairly readily available models from the domestic manufacturers. Since most fleet incentives are set for the year, there should be a lower incremental increase to replace these vehicles than is apparent on the retail market. I also think this is a good year to pass on more than minimal truck improvements as we wait to see what the upcoming regulatory changes will be to CSA regulations.
Bottom line: my advice is to look at replacing small to midsize vehicles and take advantage of the return on your sale of assets due to the inflated market. If you have a mixed fleet with medium or heavy duty vehicles, wait for later in the year incentives or for your next budget cycle to look at those assets.
Comments