Will We See A Sudden Change to Used Vehicle Values? Dale Pollack article

[Jeff Kershner]

Article from Dale Pollack in reference to vehicle pricing and values...

"I’ve had several conversations in the past week or so with dealers wondering if we’ll soon see a “burst” in what some have dubbed a used vehicle pricing bubble.

Dealers point to a recent and slight downward trend in wholesale values as proof that we’re past the high point of the used vehicle market, and we’ll soon see a dramatic tumble in vehicle values.

I can appreciate the viewpoint. It reflects a keen understanding throughout the retail automotive industry that ours is a uniquely cyclical business, where what goes up must eventually come down."

...continue reading

 

[Mitch Gallant]

As someone north of the border who sends a lot of units south this is so incredibly topical for our team. I'd love to know who the "analysts" are in order to be a bit more in tune. Any ideas who that would be?

 

[Alex Snyder]

As someone north of the border who sends a lot of units south this is so incredibly topical for our team. I'd love to know who the "analysts" are in order to be a bit more in tune. Any ideas who that would be?

The analysts at Cox Automotive are strong! That part of the organization is really good.

The outlook’s a little less rosy for the back-half of 2022. By then, we are likely to see a fall-off in retail demand due to expected increases in interest rates. News outlets this week report that the Federal Reserve is likely to raise interest rates next month, followed by similar-size increases in late spring, summer and the fall.

But even with incremental interest rate increases, analysts don’t anticipate a sudden drop, or a burst in the current used vehicle pricing bubble. Instead, they suggest we’ll see what amounts to a “an accelerated seasonal decline” in used vehicle values in the summer and fall. If the outlook proves true, it’ll be costly for dealers who load up on inventory at the peak of the market this spring and find fewer shoppers looking to purchase used vehicles.

^that's the takeaway for me.

 

[Jeff Kershner]

As someone north of the border who sends a lot of units south this is so incredibly topical for our team. I'd love to know who the "analysts" are in order to be a bit more in tune. Any ideas who that would be?

@Mitch Gallant it makes me smile when I see you slide into the forums. Don't see enough of ya.

 

[Mitch Gallant]

@Mitch Gallant it makes me smile when I see you slide into the forums. Don't see enough of ya.

@Jeff Kershner I hear you! I always get so much from the site and community.

 

[ChrisR]

As someone north of the border who sends a lot of units south this is so incredibly topical for our team. I'd love to know who the "analysts" are in order to be a bit more in tune. Any ideas who that would be?

So... you're the one sending all the rusty maple leaf trucks here.

 

[Ryan Everson]

As someone north of the border who sends a lot of units south this is so incredibly topical for our team. I'd love to know who the "analysts" are in order to be a bit more in tune. Any ideas who that would be?

Do Canadians just not buy used vehicles? It's insane how many used Canadian cars get imported into the Flint, Michigan area on a daily basis.

There's an entire industry here dedicated to Canadian recon and instrument panel replacement.

 

[craigh]

Do Canadians just not buy used vehicles? It's insane how many used Canadian cars get imported into the Flint, Michigan area on a daily basis.

There's an entire industry here dedicated to Canadian recon and instrument panel replacement.

We do buy used cars, but when the demand is higher across the border we can make more money shipping them out still.
This was especially true with trucks early in the pandemic, we were seeing 5 figure price differences between Canada and the US.

Wholesalers/shipping companies made it so easy to sell across the border that it became a pretty common thing for a couple months, but most of the dealers I work with realized that it was a short term solution because suddenly they had only 1 truck left on the lot.

 

[Mitch Gallant]

So... you're the one sending all the rusty maple leaf trucks here.

#noRustNoReward

Do Canadians just not buy used vehicles? It's insane how many used Canadian cars get imported into the Flint, Michigan area on a daily basis.

There's an entire industry here dedicated to Canadian recon and instrument panel replacement.

When you combine both a hot US market for used cars and the exchange rate it creates a big gap. Wild circumstances that move relatively slowly so have to hustle while it's hot.