Factoring Gas Prices into the Auction Equation

Lenders have been keenly focused on the recent unrest in the Middle East, wondering whether oil prices will spike like they did in the summer of 2008. One main consideration of higher gas prices is the ensuing shift in vehicle demand ― to compact cars from guzzlers. Yet a more subtle calculation that lenders have been making lately relates to remarketing.

You see, higher gas prices translate to heftier vehicle transportation costs. Though repossessed and off-lease vehicles have been commanding high prices at auction for a couple years now, rising rates at the pump will start to eat into those profits. Lenders may increasingly refrain from relocating cars to auctions that bring in higher prices, because the costs to transport those vehicles negate the gains.