Private used-vehicle transactions surge

Consumers purchased 15.336 million used vehicles through May, a 2.6 percent increase over the same period in 2000. But it wasn't necessarily good news for franchised dealers.

Much of the gain was in private used-vehicle transactions, which increased 15.5 percent. Franchised dealer used-vehicle sales were down 6.2 percent, and sales by independent dealers - used-car dealers who do not have new-car franchises - were up 2.6 percent.

Still, the surge in private used-vehicle sales probably is a short-lived anomaly and will level out by the end of the year. That's according to Tom Kontos, vice president of Industry Relations & Analytical Services at ADESA Corp. The Indianapolis auction company publishes 'Pulse,' a quarterly report that tracks the economic health of the retail and wholesale used-vehicle industry. The first report was published in July.

'There are a lot of changes that take place throughout the year,' Kontos said. 'A quarterly publication is more timely.'

Private sales surprising

Used-vehicle sales are on track to reach 42.6 million units in 2001, up one million units from 2000.

'Pulse' cites data from several sources including CNW Marketing/Research, the National Automobile Dealers Association, Automotive News Data Center and AuctionNet, which collects data from 400,000 wholesale used-vehicle transactions each month.

The surge in private used-vehicle transactions was surprising, Kontos said. In the last 10 years, as leasing became more popular and many consumers did not own their vehicles after their contracts expired, private used-vehicle sales declined.

Private sales declined from 12.6 million units in 1990 to 10.3 million units in 1999, Kontos said. During that same period, combined sales by franchised and independent dealers rose from 24.9 million in 1990 to 30.6 million.

But year-to-date through May, private sales were up 15.5 percent to 4.726 million.

'I really think what we're seeing is an anomaly,' Kontos said, explaining that by July 31, the year-to-date private sales increase had narrowed to 9.5 percent.

Older models' prices up

The report also cites interesting trends on the wholesale side of the used-vehicle business. Kontos said new-vehicle incentives and high numbers of off-lease vehicles hurt the auction prices of late model used vehicles more than older used vehicles.

From May 2000 through April 2001, according to Kontos, average new-vehicle incentives increased $643 from $1,765 to $2,408, while average auction prices dropped $220 from $11,398 to $11,178. Those incentives hurt the value of newer used cars but did not affect the wholesale prices of older models.

In January, ADESA, which operates 55 wholesale vehicle auctions in the United States and Canada, debuted its first annual 'Global Vehicle Remarketing' report on the $77 billion vehicle remarketing industry for the U.S. and Canadian markets. 'Pulse' will update information contained in 'Global Vehicle Remarketing' in March, June and September each year.

In addition to 'Pulse,' there will be other periodic reports in the series that cover several remarketing issues including international markets and the role of the Internet.

You can reach Arlena Sawyers at

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