Galves Used Auto Price List-September 2015

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Cheaper Gas Helps Full Size SUV’s

As sum­mers go, it has been a rel­a­tively mild one for the used vehi­cle mar­ket. That is not to say that there hasn’t been soft­en­ing through­out the segments, but that the declines have been less steep than we are used to see­ing and that cer­tain seg­ments have ben­e­fited sig­nif­i­cantly from cheap fuel prices and have not seen any­thing like the ero­sion we nor­mally expect the sum­mer to bring.

Chief among those vehi­cles that have ben­e­fited most from cheap oil have been full size domestic SUVs. Tahoes, Escalades, Nav­i­ga­tors, and their ilk have stood up extremely well under the pres­sure of the sum­mer mar­ket. Imports in that seg­ment have also ben­e­fited if not to the same extent as their domes­tic brethren. Cheap fuel has also soft­ened the fall of full size sedans, pick-ups, vans, and the higher end lux­ury imports that often fall steadily through­out the year.

Sport coupes and con­vert­ibles, on the other hand, have expe­ri­enced more typ­i­cal declines. There has been very lit­tle demand in those seg­ments and they have been par­tic­u­larly dif­fi­cult mer­chan­dise this sum­mer. Like­wise, cheap fuel has def­i­nitely dimin­ished demand for fuel effi­cient vehi­cles. Com­pacts and sub-compacts sedans have been tough to sell. Elec­tric vehi­cles even more so. For what­ever rea­son, smaller crossovers and SUVs have fared rel­a­tively well through­out the sum­mer despite the low cost of fuel.

Softer Sum­mer Declines Lead­ing to a Harsh Fall?

The ques­tion is, what will the future bring? If you believe as we do, that 70–80% of most vehicles’ yearly depreciation occurs in the six month period from June through Novem­ber and that the sum­mer declines have been less than usual, does that mean that we can expect the fall mar­ket to be harsher than usual? We have to wait for that answer. We will say that if the first cou­ple of weeks of Sep­tem­ber is an indi­ca­tion, that might very well be the case. The Euro­pean and Asian lux­ury seg­ment has seen sig­nif­i­cant declines of late. Very late model vehi­cles of all sorts are also expe­ri­enc­ing greater than usual drops as man­u­fac­tur­ers increase sales incen­tives while chas­ing yearend mar­ket share. Increas­ing lease ter­mi­na­tions are com­ing home to roost. The stock mar­ket declines will surely impact con­sumer confidence.

No one knows what the future will bring. In all prob­a­bil­ity, nothing we haven’t seen and handled before.