Dealers waiting for used-vehicle prices to decline might as well dig in their heels for the foreseeable future, according to data presented by the National Auto Auction Association's chief economist.
Ira Silver predicts that this year's auction volume will drop by about 300,000 units while used-vehicle sales will increase by about 1.5 million compared with last year.
The used-car market faces “not a demand problem but a supply problem,” resulting in historically high prices, Silver said during a presentation at the association's annual convention this month. Used-vehicle supplies are low in part because of weak new-vehicle sales.
Separate data from Manheim and ADESA Inc. show marginal seasonal price declines in August when compared with July 2010 and increases when compared with August 2009.
The average used-vehicle price in August was $9,993, 0.7 percent lower than the average price in July and 0.4 percent higher than the average price in August 2009, ADESA's data show.
The monthly Manheim Used Vehicle Value Index stood at 118.8 in August, down 0.1 percent from July's reading and a 2.1 percent increase from August 2009.
Tom Kontos, executive vice president of customer strategies and analytics at ADESA, sums it up this way: “We're going to scramble for every car we run across our lanes.”