At the moment just about anything of good quality and acceptable mileage has spiked in the last month. A general scarcity of product caused by sluggish new vehicle sales and a lack of good trades has strengthened all types of vehicles. Even those lease returns coming into the market in droves have maintained value better than expected by the manufacturers and lenders as dealers fill holes with product they might normally ignore. The only caveat is that used vehicle sales are also slow at the moment and if that doesn’t change we might be looking at a short spring.
Leaders in the market comeback are those sport coupes and convertibles that were almost un-saleable in the dead of winter. Mustang GTs and Cobras, Firebirds, Camaros, and, of course, Corvettes have made big moves. Among the imports, BMW 3 series and Z series convertibles, Mercedes CLKs, SLKs and SLs, and all Porsches have spiked. Toyota Celicas, convertibles in particular, have rebounded particularly well. All those vehicles have gone up in the book already and some may continue to do so.
The rest of the market is very strong as long as the quality and mileage are favorable. High mileage vehicles continue to be difficult. Whatever you think is an appropriate deduction probably isn’t and we suggest that you err on the side of caution, especially if you are intent on wholesaling the vehicle. We think we are the only price-guide with credible mileage calculations and we are about to revise them to make them even more useful. We remind our customers that as high mileage gets more extreme, the deductions get less extreme, and that adding for low mileage is about 50-60% of what the deduction/1000 miles would be. Of course, Online we can make those adjustments electronically and be very accurate.
Good older vehicles with acceptable mileage have experienced some strengthening as well. Expect that trend to continue as good quality older vehicles remain scarce and in demand.
We think we can look forward to a long and strong market in general, but that the first segment to collapse and probably the one that bares watching is the lease return segment. If retail sales continue to be tepid or if manufacturers create a new round of heavy incentives on new, those 1999 and newer vehicles that are out there in numbers are likely to suffer quickly.
Let’s all enjoy it however long it lasts!