Despite the mass of new-vehicle incentives in 1998, used vehicles held their value throughout the year.
The AutoNation USA and CarMax used-car chains blamed their poor performance in 1998 on competition from those new-vehicle incentive programs. But that did not hurt the rest of the used-car market, said Tony Moorby, president of auction company ADT Automotive Inc. of Nashville, Tenn.
'It was an excellent year. It was probably the best year we ever had,' Moorby said at a press conference introducing ADT's 1999 Used Car Market Report.
The ADT report shows another year of increasing used-vehicle prices and volume at wholesale auto auctions.
The increasing affordability of new vehicles and the booming U.S. economy have turned many used-vehicle buyers into new-vehicle buyers. But that same economy combined with new-vehicle shortages during last year's General Motors strikes kept used-vehicle sales alive.
Dealers who buy used vehicles at auction were willing to pay a higher price in 1998 because demand for those vehicles was still strong. ADT's wholesale used-car price index showed year-to-year increases for every month of 1998, including a rise of 11.1 percent in December.
Moorby says the economy is strong enough to boost sales of both new and used vehicles in 1999.
ADT operates 28 auctions in the United States.