Used-vehicle supply and demand, the economy, and interest rates and credit are among the market dynamics driving wholesale used-vehicle sales and prices.
They were also frequently cited as trends to watch in 2018, by analysts, remarketers and others who attended Used Car Week in November.
The National Auto Auction Association held its 69th annual convention in conjunction with the National Remarketing Conference portion of Used Car Week. Here are some trends and insights shared during panel discussions and on the sidelines at the conference.
Off-lease trucks come rolling in
Yes, off-lease vehicles are still front and center, and is there any wonder? About 300,000 more off-lease cars and trucks will return to the market in 2018 than in 2017, bringing the total to 3.9 million, Cox Automotive predicts. Jonathan Smoke, Cox Automotive chief economist, said used-car unit sales in 2017 would increase roughly 2 percent and continue to rise in 2018, aided by new-vehicle prices that are beyond the budgets of many households. He is also monitoring new-vehicle sales, which he believes will drop to around 16.6 million in 2018.
Crossovers and SUVs, which became very popular on the new-vehicle side three or four years ago, will start to enter the used-vehicle arena in more appreciable numbers in 2018, Smoke said.
Volume, repos and the economy
Credit and interest rates
Michael Vogan, assistant director, economist, at Moody’s Analytics, is particularly interested in auto loan default rates, which he agrees are trending upward, especially in the deep subprime sector.
New car incentives, leasing
Also commanding attention at the conference was that auction companies and others are investing heavily in developing data analytics to assist manufacturers and dealers buy and/or sell more used-vehicles, more efficiently. Take Black Book.
Among its offerings is scenario analysis, which uses a wholesale customer’s purchase and sales history to devise individualized strategies to weather various market situations, such as an economic downturn or skyrocketing gasoline prices, said Anil Goyal, Black Book senior vice president, automotive valuation and analytics.
“We have data scientists working and we provide very custom analytics depending on the needs of our customers,” he said.