Fed Hearing ‘Mixed’ Reviews on Used-Car Sales
How healthy have used-car sales been in the U.S. the past seven weeks? Well, it may depend on exactly where you are in the country.
For every pocket of strength, there seems to be a weak spot. At least that’s the word from the latest Beige Book report of current economic conditions from the Federal Reserve.
In Wednesday’s report, the Fed found the state of the used-car market to be “mixed” throughout the country.
“Used-car sales remained robust in New York and rose in Cleveland, with Cleveland District inventories remaining tight; in St. Louis, a majority of dealerships noted that used car sales had decreased relative to new-car purchases, and in Minneapolis, used-car sales softened,” the Fed reported.
The San Francisco region, meanwhile, notched year-over-year gains in both the new- and used-car markets, the Fed noted.
Similarly, the previous report — which came out on Oct. 10 — painted a picture of a rather “mixed” used-car market, as well. During that reporting period, the Twelfth District (San Francisco) was also a hot used market, while the Second District (New York) and Fourth District (Cleveland) showed “flat” sales.
This time around, though, Cleveland, in particular, experienced a modest gain.
“Purchases of used vehicles rose slightly, though inventories are still tight,” the Fed explained. “Leasing continued to grow in popularity, which should help to replenish the used-vehicle inventory by mid-2013.”
In New York, used-car strength continued. Commenting on this region, the Fed noted: “Auto dealers in upstate New York report some flattening out in sales in October, though used-car sales reportedly remain fairly robust. There has also been some softening in business at dealers’ service departments. Wholesale and retail credit conditions remain favorable.”
Meanwhile, for the Eight District (St. Louis), the Fed offered some statistics that illustrated how the used-car market didn’t carry as much strength as the new-car side.
“Twenty-four percent of the car dealers noted that new-car sales had increased relative to used-car sales, while 6 percent reported the opposite,” officials noted.
Lastly, the Fed found that in its San Francisco region, both new- and used-car sales “remained strong,” and both are projected to see more improvement by the end of 2012.