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Wednesday, 14 October 2020 23:34

Why Dealers Are Now ‘Exercising Caution’

Written by Auto Remarketing Staff

Index

Dealerships sold millions of used vehicles during the summertime, including a four-month stretch of year-over-year sales gains.

However, Black Book isn’t necessarily seeing buyers and managers rushing to replenish store inventory.

 

According to their newest "COVID-19 Market Insights" released Oct. 13, analysts highlighted a typical autumn wholesale price cooldown, explaining those softer prices aren’t always bringing the hammer down to send vehicles onto transport trucks bound for stores.

 

“Retail demand has softened, but dealers are still in need of inventory after the strong summer sales. However, they are exercising caution in purchasing high-priced inventory,” Black Book said in the latest report. “Instead, they are being very selective with their purchasing decisions.
 
“Lower-mileage used vehicles continue to be good substitutes for the models that still lack in new supply, like full-size trucks that have days’ supply well under 30 days,” analysts added.

 

Speaking of those full-size trucks, analysts noticed prices for those units finally dipped after 19 weeks of increases. Full-size truck values dipped by 0.18%.

 

Triggered in part by that movement, Black Book’s volume-weighted data showed overall truck segment values---including pickups, SUVs and vans---declined by 0.34% last week, nearly doubling the previous week’s drop of 0.19%.

 

Analysts mentioned that both mainstream and luxury subcompact crossovers continue to experience heavy value declines as they plummeted by 1.13% and 0.98%, respectively.


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