We see continued stability and easing of used vehicle wholesale prices into the autumn. A primary reason for this is the continued attention of new car dealers to sell new cars. Production levels by the manufacturers are high – they have ramped up output at a rate that will hit 14.9 million vehicles produced in 2012. Inventory levels have been increasing month by month for all but a couple of manufacturers – check out the data in Tidbits. The factory allocation programs require “turn and earn” performance which means that dealers are frantic to sell the vehicles they have so they can earn more of the hot products. It is a system that works for the factory but not for the dealer. Consequently, the new car dealer is preoccupied with new vehicle sales especially now when they are shoveling out the 2012s to make room for the 2013s. They also suffer from a nasty hangover caused by overspending on used cars in the spring when they did not have enough new cars to sell. The need for used inventory led to reckless buying. Dealers currently have a lot of overvalued used inventory. You see how stuffed new dealer lots are with inventory when you drive by. They have been selling new cars and just a few used. This has pushed them pretty much to the sidelines at the auctions. What used cars they are getting are coming primarily from new car trades. Talk about trades – watch out – these […]