Page 14 - GIADA-Sept-2018-Final

2 FACTORS PERHAPS DRIVING RISE IN USED-VEHICLE SALES Franchise
Dealers Show
Continued from page 11 alternative, while also touching on the
Tariff impacts potential price impact of proposed auto Stability
Another factor perhaps driving the tariffs.
strength in the used-vehicle market is
dealer reaction in anticipation of the “There is still a high demand for used cars By Used Car News
impact from the proposed auto tariffs. because when high-quality, off-lease cars
are returned to dealerships, consumers Urban Science released statistics and
“On the used market, we might be seeing are presented with a cheaper alternative to insights from its 2018 mid-year Automotive
some early pull-ahead activity, where purchasing a costly new vehicle,” Mylrea Franchise Activity Report (FAR), indicating
… many dealers are buying inventory to said. “Prices for new cars are on the continued stability in the number of
try and get ready for [the proposed auto rise, and as leasing continues to grow in automotive dealerships in the United States.
tariffs] if and when they go into effect, popularity, prices continue to go down in
which probably wouldn’t be until later this the used car market. Put simply, used cars As of July 1, there were 18,252 dealerships
fall,” Chesbrough said. are often the most realistic purchase for (rooftops), a 0.2 percent increase from the
car shoppers. January 1, total of 18,213. The number of
Dealers perhaps are aiming to acquire franchises, or brands a dealership sells, also
used-car inventory before these proposed “Given the pending automotive tariff, experienced a period of stability, slightly
auto tariffs are effective, as they’re apt to however, there’s a chance that used-car decreasing from 32,029 on January 1, 2017
increase used-car prices, Chesbrough prices could skyrocket alongside that of to 32,024 as of July 1, 2018.
explained. new cars,” he said, linking to this CNN
Money story. “This will make it even Since 2010, the dealership network has set a
In comments provided by email in early more important for used-car dealerships new normal pattern of stability. The Urban
July, PureCars chief executive Sam Mylrea to monitor inventory and implement Science data shows that 98 percent of local
echoed much of the same sentiment about the most efficient marketing strategies markets had virtually no net change in
used cars being a more cost-effective possible to move cars off the lot.” n dealership ownership. n

12 | GIADA Independent Auto Dealer SEPTEMBER 2018