AUTOMOTIVE NEWS: 4 Million Off Lease Vehicled Will Flood Market

In a story written by Arlena Sawyers,Automotive News reports that off-lease '99s Come Back With a Roar Some 4 million vehicles that were leased in 1999 are coming back to the market this year, and about 57 percent of them will go to wholesale auto auctions, giving manufacturers fits as they scramble to keep inventories at manageable levels and used-vehicle prices stable. This year's spurt in the flow of off-lease vehicles, about 14 percent more than came back in 2001, according to Manheim Auctions, is the result of the strong market in 1999. That year, the industry sold a then-record 16.9 million new cars and trucks - about 26 percent of them were leased via attractive, subsidized deals. Although this year's record number of off-lease vehicles is a challenge for manufacturers, there is some good news. Remarketing experts say used-vehicle prices bottomed out last fall and resale values are increasing. Still, it's hard to ignore the law of supply and demand: A flood of vehicles in the resale market adversely affects resale values and in turn reduces residual values.