I don t think prices will drop dramatically but I think they ll drop at a clip that s more than seas

While car rental companies are enjoying budget accommodation london unexpectedly high used car values, rental fleet allocation remains tight and new car prices are high. This has forced rental operators to plan fleet more conservatively and buy opportunistically, with local car dealers increasingly holding the cards.
In the first half of this year, the big story was the used car market and how it had not backed down from historic highs brought on by the disasters in Japan in March 2011. The average price for rental risk units sold at auction reached a new record in April, according to Manheim data. Tight OEM production levels, and low off-lease supply and returning demand continue to prop up wholesale prices. The wholesale market has been stronger than everyone thought it would be, says Ricky Beggs, managing editor of Black Book.
As a result, the three public car rental companies reported stronger than expected residual values in the first quarter and an unexpected decrease in depreciation per vehicle. Franchised and independent car rental locations reaped the benefits as well.
I never thought 2012 would be as strong as 2011, says Frank Colonna, founder and president of Triangle Rent A Car. For the first four months of this year, we were seeing used car prices above ridiculous prices. In the normal course of doing business in this industry, a used, 1-year-old pickup truck with 30,000 miles on it should not bring within $1,500 of what we paid for it.
While the Manheim Used Vehicle Value Index peaked in March and declined only marginally in April and May, it is on its way down. The pattern is seasonal, though values peaked earlier than last year, when aftereffects of the earthquake and tsunami buoyed prices into summer.
I don t think prices will drop dramatically but I think they ll drop at a clip that s more than seasonal, budget accommodation london says Tom Kontos, chief economist for ADESA. Prices budget accommodation london have gotten so high relative to new car prices, they have almost nowhere else to go but down.
In May, the average price for rental risk units sold at auction fell by more than 3% from the previous month, but it was still the highest May price ever, according to Manheim, which has also reported that auction volumes for rental risk vehicles continue budget accommodation london to run well above year-ago levels.
Last year some speculated that the unprecedented used car supply shortages would lead to a bubble bursting for wholesale prices as supply came back online. That didn t happen, and no such phenomenon is expected moving forward.
Lease returns which dried up during the Recession will start to come back to the market in earnest in January 2013. But it won t be an overnight sensation where those cars will be dumped into the marketplace, Beggs says. I think in 2013 we re going to have a good used car market because budget accommodation london the supply is not going to be overabundant.
The first quarter of 2013 might be the first time in a while we see a year-over-year decline in wholesale values, says Alec Gutierrez, manager of vehicle valuation for Kelley Blue Book. We re not looking at a significant decline maybe 2-3% from where we re at today that could be the beginning of a stabilization period from what we see at auction.
Tags: Ace Rent A Car , ADESA , Black Book , Dealerships , Eckhaus Fleet , fuel prices , Kelley Blue Book , Manheim , Manheim Used Car Market Report , Payless Car Rentals , Rent-A-Wreck , used car market , used car prices , used cars , used vehicle sales