Used-Car Sales Struggle, Along With Everything Else Auto

Check this out, on edmunds.

Sourced From: Edmunds Auto Observer, February 2, 2009

Situation:

1. Used vehicles typically gain on new-car sales when times are tough
2. Consumers scale back expectations and more settle for less expensive “pre-owned” products
3. Current times so tough consumers even discouraged from buying used vehicles
4. Franchised dealers (2008 sales -7%) better off than independents (-17%)

Significant Points:

1. This may be worst year in 2 decades for used-car sales overall
2. Credit problems still inhibiting sales for sub-prime consumers willing to buy
3. Heavy new-car incentives devalue used cars in competition
4. Slow new-car sales and longer loans resulting in fewer late model trade-ins available
5. Available trade-ins are disproportionately gas-guzzlers

Says:

“The potential customer in the used-car market, in aggregate, is anyone who has a car and wants to trade up to something better. But today, because of financial conditions and tighter credit, they can’t trade up. People are just holding on to their cars for longer.” — Tom Webb, chief economist, Manheim Consulting

“The problem is with tightening credit. Used-car wholesale prices are down fairly significantly, but consumers are having trouble taking advantage of that because they can’t get credit.” — Joe Spina, industry analyst, Edmunds.com
“The used-car business has always been the lifeblood of the new-car business, and the dealers who are surviving out there now are the ones that realize that they’ve got to put a bigger focus on used cars.” — Howard Polirer, AutoTrader.com

Charles Butler
MCS