MT. LAUREL, N.J. -

2011 was a banner year for used-vehicle sales and 2012 may produce the same profitable results. While the rest of the economy has struggled, remarketers have thrived. They’ve taken advantage of the undersupply of both new and used vehicles.  Even as the third quarter saw fluctuations in this elevated market, prices were still 3.4-percent higher over the same period in 2010. Barring unforeseen major economic events, the wholesale used-vehicle market should remain the same, if not increase, this year.

The interest in used vehicles has grown as the economy continues to struggle. Used vehicles that are only a few years old and are well-maintained have become extremely attractive to buyers. The basic laws of supply and demand have driven up prices and led to an undersupply of used vehicles. The undersupply is due to two main reasons:  the manufacturers’ bankruptcies and the tight credit market. Supply has been so short that some buyers are stretching out of their comfort zone to pay more for higher mileage vehicles in relatively good condition. 

Despite an overall strong market, certain makes and models are selling better than others. There’s been a particular boom in interest for compact and midsize cars, while trucks and vans have only seen modest gains. On the plus side, older vehicles that would usually net modest returns should see an increase in value. Buyers will be less likely to purchase late model-used vehicles when the monthly payments for these vehicles remain only slightly less than a brand new model. Still, positive market activity far outweighs the negative at this point.

Unfortunately, this strong market will not last forever, but most forecasters believe there is still plenty of time to take advantage of this opportunity. While the used-vehicle market will still face traditional seasonal fluctuations, supply is not expected to stabilize until late 2013, giving remarketers a full two years to maximize returns. While many fleets may look to jump on this opportunity by cycling vehicles out of service earlier than planned, a careful and thoughtful approach is necessary.

This year, fleets will need to make sure that they are properly weighing the returns of remarketing efforts against their business needs and overall costs. In this seller’s market, ARI has the ability to return clients the high prices through multiple remarketing channels. ARI is connected to buyers nationwide and internationally through its physical channels and Virtual Market online outlets. In the continued seller’s market, it will be even more important for fleet managers to be well informed.

This article was written by Bob Graham, vice president of vehicle remarketing for ARI.