Automotive Fleet

DEC 2013

Magazine for the car and truck fleet and leasing industry

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FLEET REMAIN STABLE FOR CY-2013 The continued shortage of quality used vehicles and the availability of low interest rates for dealers to foor plan inventory and fnance retail buyers were two key factors responsible for a stable wholesale used-vehicle market. BY MIKE ANTICH T he used-vehicle market has always been driven by supply and demand. In the 2013 calendar-year, vehicle supply in the wholesale market continued to be tight relative to demand, helping bolster resale values. "Te two biggest drivers in the used-vehicle market for CY-2013 were the continued shortage of quality used vehicles in the market and the availability of low interest AT A GLANCE The supply of used vehicles is continuing to increase each year, which will eventually create a supply/demand equilibrium in the wholesale used-vehicle market. ● Industry analysts are projecting whole sale prices to decrease around 5 percent in the next one to two years and level out thereafter ● While resale values for most vehicle segments is moderating, truck resale values will continue to remain strong in CY-2014. ● 24 AUTOMOTIVE FLEET I DECEMBER 2013 rates for dealers to foor plan inventory and to fnance retail buyers," said Darrin Aiken, assistant VP, vehicle remarketing for Wheels Inc. In addition, lower acquisition costs and longer AIKEN loan terms helped bolster the used-vehicle market. "Te only challenge was supply being so tight due to fewer vehicles being sold and fewer traded in at the new-car stores, and even fewer fnding their way BEGGS into the wholesale market," said Ricky Beggs, VP and editorial director of Black Book. However, the supply of used vehicles is continuing to increase each year, which will eventually create a supply/demand equilibrium in the wholesale used-vehicle market. GE Capital Fleet Services quantifed the increase in inventory in the wholesale market. "Volume in the wholesale usedvehicle market is up in 2013 by approximately 3 percent afer having been steady in 2012 when compared to 2011," said Steve Jastrow, strategic consulting manager for GE Capital Fleet Services. "In 2012, the wholesale market was past its historic peak, and resale values were mildly declining as volume returned to normal levels," said Bob Graham, VP, vehicle remarketing for ARI. "Although the wholesale market to date in 2013 has been weaker than 2012, resale values currently remain slightly above the traditional average. We expect resale values to continue declining as the number of used vehicles returning to the marketplace increases and becomes level with inventory demands." One factor that helped boost resale values was the higher transaction prices for new vehicles, which acts as an informal ratio to calculate used-vehicle values for comparable,

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