Last updated Friday, February 6, 2004

It is early February and there have been many years when the market would have been booming by now. That seems like ancient history. It has been at least a few years since we have had an intensely hot spring market, and 2004 looks like it will follow the recent pattern of moderate spring markets. The good news is that that is a significant improvement over the frigid market we experienced in the latter months of 2003. There is reasonable demand for product that is at least bringing some stability to what was a highly unpredictable and declining market. While it is difficult to get buyers go overboard on all but the most outstanding vehicles, decent cars and trucks are saleable and it we are beginning to see some stability in the book values. High mileage vehicles, however, remain difficult to sell and caution is recommended when dealing with them.

You would expect some strengthening of the convertible and sport-coupe market at this time of year and, in fact, that is happening. Corvettes have already seen improvement and we can expect the rest of that class to follow. Pick-ups and SUVs have continued to be stable as the recent difficult weather in the northeast has fueled that market.

There is still a glut of certain products coming into the market via manufacturers’ off-lease sales and some products have suffered notably as a result. Volkswagen, Audi, and Mercedes in particular come to mind. They, along with some other volume sellers, have experienced significant book erosion over the past few months and there may still be some room until they reach the floor. Even Honda has experienced some serious softening of their values as supply has overwhelmed demand.

We think there is still some room for the market to strengthen as we get further into spring and the weather improves and we expect increased stability because of that.

Dan Galves