Dale Pollak has words of caution for dealers who have likely experienced one of the most topsy-turvy markets in at least a generation, if not ever. Pollak, 62, is executive vice president at Cox Automotive and creator of the vAuto inventory management software, as well as an author of several books on the used-vehicle market.
He has talked about the market going through four quarters of "crazy" this year, though he was not referring to traditional three-month periods. The first quarter was roughly January and February, when the market appeared somewhat seasonal, followed by the second quarter in about March and April, when Pollak said "it was like a bomb went off" and wholesale prices accelerated at unprecedented rates.
The following are edited excepts from an interview with Staff Reporter David Muller this month.
Q: When we last spoke in May, you had said we're in the "third quarter of crazy" for used vehicles. Where are we now?
A: So we are now clearly in the end of the third quarter. What we know to be true is that the maximum acceleration of wholesale prices occurred mid- to late March, early April. So if wholesale prices took off like a rocket ship, they reached their peak acceleration, straight up, end of March, beginning of April. And then at that time, what we had predicted is that for the next six weeks or so, wholesale prices would continue to rise but at a much more moderate rate. And what we anticipated would happen is about now, that first or second week of June, wholesale prices would plateau. And that is, in fact, what we're seeing in the data. That plateau stage is the first stage of the fourth quarter, which will certainly occur this month in June. And I think these prices will plateau, stay steady — cars will not appreciate or depreciate in any sort of material manner — until late July, early August, which I would consider to be the point in time where we'll start to see a depreciation in values as you would expect to see.