December 16, 2013
www.usedcarnews.com
ON THE WEB: Study Shows Incentives Hurt Residual Values
SEE OUR AD INSIDE ON PAGE 10
Recon Company Rolls into New Year
A new vehicle cash incentive of $1,000 reduces the price of a one-year-old used vehicle by nearly $600, according to the NADA Used Car Guide in its latest report, NADA Used Vehicle Price Report: Incentive Analysis and Impact. Comparatively, $1,000 spent on finance and lease incentives reduces the price of a one-yearold used vehicle by $165 and $89, respectively.
Drivers Clueless About Dashboard Lights
Almost half of drivers would not know what to do if their car’s tire pressure or brake system warning light flashed, and almost 20 percent of people don’t even know what the lowfuel light means, according to an Insurance.com survey.
Used Car Sales Fell By Almost Half a Million
True Car estimates that usedcar sales were 3,000,508 in November. That is down from 3,457,244 in October.
Photo Courtesy of Capital Automotive Reconditioning Services FINE CONDITION: Workers for Capital Automotive Reconditioning Services spruce up vehicles at one of the auctions the firm services across the country. CARS celebrated its 10th anniversary earlier this year. By Jeffrey Bellant
Ron Hope started his reconditioning business a decade ago, servicing cars at the former Butler Auto Auction in Pittsburgh. “We started with 12 employees and a legal pad,” he said. “By the end of that first day
we only had six employees.” But more than a decade later, Capital Automotive Reconditioning Services (CARS) has hundreds of employees at wholesale auto auctions around the country, with bigger plans in 2014. Hope, president and CEO of the business, said
services include: detailing, mechanical inspection/repair, paint/ body repair, sale-day arbitration, condition reports and inspections, and lot operations. “We staff the areas we’re operating,” Hope said. “We supply labor, management and materials.”
Hope said the goal is to have his reconditioning services work seamlessly within the auction. “The advantage to the auction is that we take care of all the scheduling of employees, the hiring/ firing and disciplinary action,” he said. Continued on page 14
Rush - Dated Material
Auto Finance Delinquency Rates Start to Rise
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The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.04 percent in the third quarter, up on both a quarterly and yearly basis (from 0.87 percent in the second quarter and 1 percent in the third quarter of 2012). The delinquency rate, though, is well below the third quarter average of 1.22 percent observed between 2007 and 2013. Auto loan debt per borrower increased for the 10th straight quarter, moving up 4.7 percent from $15,943 in the third quarter of 2012 to $16,685 in the third quarter. On a quarterly basis, auto loan debt also increased from $16,410
in the second quarter. The data provided are gathered from TransUnion’s proprietary Industry Insights Report, a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the U.S. The subprime delinquency rate increased to 5.6 percent in the third quarter from 5.3 percent in the third quarter of 2012. Despite the increase, the delinquency rate remains near levels observed in recent third quarters.
12/9/13 5:26 PM