Last updated Thursday, March 4, 2004
It has been a long hard winter, and the used automobile market has been pretty much as harsh and cold as the past season. The beginning of March, however, has brought some improved weather and the promise of better things to come, and the automotive market has fallen into step. There is real optimism among the players and a definite increase in demand for product. Coupled with a general scarcity of vehicles, prices are rising and selling is considerably easier than it has been. Isnít it wonderful when someone actually wants what you have instead of doing you the favor of taking it off your hands?
How long it will last, no one knows. If there was a significant spike in retail used sales we could expect this improved market to have some legs, but the recent upsurge seems to be fueled more by lack of supply than demand to replace sold inventory. Hopefully that will change and this encouraging upturn will continue.
Two words of caution:
Those off-lease vehicles that continue to flood the marketplace have not yet bottomed out. Mercedes and Honda, for example, have historically had excellent resale value. Recently their values have eroded significantly as supply has simply overwhelmed demand. Several other manufacturers are suffering similar fates. The good news is that there are some bargains out there if you are not chasing the cream of the crop.
Medium mileage vehicles are very difficult to sell. There are active buyers for low mileage vehicles and even for high mileage vehicles that are priced accordingly. There are few buyers willing to pay up for the in-between mileage cars and trucks, and their value approaches the higher mileage segment of the market. It is relatively easy to find buyers for an í01 BMW 525 with 25,000 miles or 75,000 miles, but the one with 45,000 miles has few takers and they are only motivated by what they perceive as a low price.