The following are what is heaviest on the minds of dealers as they prepare for a used car spring selling season:
1. Increasing Fuel Prices
2. Increasing Supply
3. Decreasing Value
Fuel has increased at a nationwide average of $.20 a gallon in the last two weeks. If you have abundance of large trucks and SUV inventory then now is the time to retail your way out of such vehicles. Fuel prices go up in spurts and before the next heavy increase hits it would be better to have a lower supply of these vehicles on your lot. You need to be extremely cautious when adding value to these vehicles before trading them in the coming days and weeks.
Dealers are talking to us about seeing more 2013s already showing up at the auctions as well as more of the shorter term leases for brands like BMW and Toyota now coming back into the market. This increase in supply will create more options, while at the same time manufacturers are trying to swing the pendulum back to the side of new cars. This increase in supply will ultimately cause a decrease in value.
More inventories on the market will create more competition among pricing; the values of just about every type of used car will be decreasing as we move into the late spring and early summer. It could happen before that, but regardless of when – the fact is it is coming soon. That is why you are going to have to watch for what inventory is the most sought after and have your pricing in accordance with it to generate traffic and turn the inventory.
John Paul Strong
John Paul Strong combines his two decades of automotive marketing experience with a team of more than 140 professionals as owner and CEO of Strong Automotive.