November 22, 2012

The Impacts of Sandy on Car Markets

We hope everyone weathered the ravages of Hurricane Sandy. It is amazing how an event launched by Mother Nature can alter so many landscapes -personal, physical,community and commercial among many others. You have probably seen the devastation of homes, communities and businesses. I’m going to speak from the point of view of the poor vehicle that got wasted and how there will be a shortage of vehicles in both the new and used marketplaces to replace the ruined ones and how prices will probably rise in the next few weeks. We will also show you where there is a brief window that is right here and right now to beat the inevitable rise in prices and shortage in inventory selection. Sorry for the seemingly unabashed sales pitch here but there is an opportunity and we’re not making this stuff up as politicians of all stripes are more than willing to do. You might have noted how many cars were and still are underwater and wondered about what was going to happen to those cars. Think about how many vehicles may have been swamped or even compromised by all that water. Both individuals and dealerships were affected in a large swath of a very densely populated area of the eastern US. We think that there are going to be many people who are going to need to replace or who will want to replace their vehicles. There will also be a lot of trashed vehicles finding their way back into the […]
August 22, 2012

Auction Action

The wholesalers have very little hair left and they are not happy about it. The only cars bringing very strong money are hard to get hot models in beautiful condition with correct mileage, color and equipment along with the older Asian vehicles. Everything else is cheap and available. There are some amazing opportunities on higher mileage euro vehicles that everyone is scared of. The engineering of the European vehicles is superb and a well cared for vehicle can give a lot of pain free and low cost service. In our personal stable, my wife and I both drive as our everyday vehicles European cars that have a combined age of 19 years and over 300k miles! I know that we are cheap but we also really appreciate driving a safe, comfortable and reliable vehicle. If you want a lot of bang for the buck think about it. There will be a time when the export markets reignite and these deals will evaporate. Sooo, where are the other deals?
August 22, 2012

Wholesale prices slipping

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 […]
August 20, 2012

Tidbits #1

According to the industry publication F&I magazine used car financing rates in July averaged 9.02%. We can get you 1.99% to 2.99% through AAA. Experian reports that the average used vehicle loan is $17050 NADA data report shows that used vehicle revenue in June rose nearly 10% and that profit margins were 12.5% An important statistic is the “days supply” of inventory. This calculates how many cars are in inventory based on the sell rate. If a dealer sells 10 cars in a 30 day period and has 10 cars in stock then his days supply would be 30. If he had 30 cars in stock his days supply would be 90 and so on. As of July 1 vehicle stocks have been growing – Honda was up to 58 days from 48 a month earlier, Toyota was up to 41 days from 32, General Motors is up to 76 days, Ford is up to 58 days, Chrysler is up to 67 days while hot sellers Hyundai is at 30 days, BMW is at 24 days and Audi Q5s and Q7s are at a paltry 18 days supply – no wonder you can’t get any deals on those. North American vehicle production is expected to hit 14.9 million units. This is an increase of 13% from 2011 and is another reason that we can expect that price stability should reign for used vehicles. Manufacturers have been adding gears to transmissions to pump up fuel economy. Amazingly, there are 8 and […]