2 Positive Signs for Used-Car Market
Here’s just one nugget of good news from the Federal Reserve’s latest Beige Book report that dealers might find encouraging for their used-car operations.
Among the districts where contacts commented on used-car supply, there were some signs of progress.
In the Richmond District, for one, the Fed said dealers indicated there have been more used cars available. And in the Cleveland District, even amid a struggle to find quality inventory, there was a silver lining.
“Used-vehicle purchases declined in April on a month-over-month basis. Several dealers commented that it is difficult to find a quality used car,” the Fed noted.
“However, they believe that as lease rollovers start to come in this year, the availability of low mileage used cars will improve,” it added. “Two of our contacts noted that financing activity in the subprime market is starting to pick up.”
Granted, the used inventory struggle appeared to drag down sales a bit in areas of the San Francisco District.
“Automobile sales remained at high levels, although a shortage of used vehicles has restrained the pace of activity in some parts of the District,” the report stated.
But in another positive sign for the used-car market elsewhere in the Beige Book, a couple regions reported stronger used-car sales
The Fed noted in its auto market commentary for the Chicago District that new-car sales were not as strong as expected, “but used-vehicle sales increased at a faster pace.”
Likewise, over in the in St. Louis District, the mood among dealers appeared rather strong, particularly for the used-car side, where half the dealers saw their sales climb relative to the new-car side, according to the Fed.
Conversely, the reported indicated that “17 percent reported the opposite.”
It was a bit of a mixed bag in the New York District.
“Auto dealers in the Buffalo and Rochester areas report that new-vehicle sales were robust in April and early May, running well ahead of comparable 2012 levels. On the other hand, sales of used automobiles softened further and are down from a year earlier; this is partly attributed to better deals on new vehicles,” the Fed wrote. “Wholesale and retail credit conditions for auto purchases remain in good shape.”
Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.