December 2, 2013
www.usedcarnews.com
ON THE WEB: Cars Cost Most Teens Too Much Money
1-800-554-1026
Dealership Invests in Cars, Customers
Driving-Tests.org launched a special investigation into the real costs of car ownership for teenage drivers. The total estimated cost for a teen to own and maintain a car can be as high as $581 per month.
Site Finds East Coast Underprices Cars
Website iSeeCars released a list of the top U.S. cities that offered the most underpriced cars for sale. The online firm found that New York City had two times the cars at least five percent below iSeeCars’ estimated market value than Los Angeles. Eight of the top 10 best cities for used car deals were on the East Coast.. Photo by Kip Malone
More Borrowers Fall Behind on Auto Loans
BORN AGAIN: Marc Powell, president of Recarnation, checks out the inventory on the lot at his Albuquerque, N.M., store.
Transunion reports that he auto loan delinquency rate increased to 1.04 percent in the third quarter, up on both a quarterly and yearly basis.
By Ted Craig
A New Mexico dealer has big plans for growing his business and reinventing the traditional buy-here, pay-here model. Albuquerque-based Recarnation offers in-house financing to its customers, but the focus is on providing
hassle-free transportation. Other dealers have told Recarnation President Marc Powell his store is “over improving” its cars. Powell said he spends an average of $2,500 reconditioning each unit. Recarnation recently added an 18,000-square-foot garage for what it advertises
as a life-extend process. The store also offers rentals and title loans to help its customers get through unexpected events. This is a long way from the operation’s beginnings, when it sold on price. In fact, the store’s original name in 1999 was The $5,000 Car Store.
The average price today is $9,500, so a new name was needed. Recarnation fits the kind of forward-thinking approach Powell said he wants his store known for. Another example of this different approach comes in having non-commission Continued on page 7
Rush - Dated Material
Used Car Prices Set to Fall as Supply Increases Used car prices continue to soften. Edmunds.com reports that the average used car sold by franchise dealers in the third quarter of 2013 was $15,617. The average price was 2.8 percent lower than in the previous quarter, and 0.9 percent lower than in the third quarter of 2012. The last time used car prices ran so low was in the third quarter of 2009, when the average car sold at a franchise dealership was $14,808, Edmunds reports. Lower retail prices have yet to reflect themselves at auction. Although wholesale prices are lower, they remain at historically high levels.
Manheim chief economist Tom Webb said wholesale prices were moderately higher in the first 15 days of November than in October, when adjusted for mix, mileage and seasonality. Tom Kontos, ADESA’s executive vice president of industry analysis, said wholesale prices will continue softening despite recent strength at auction. That is due to increased supply of used vehicles. Kontos said prices today are being supported in part by a reluctance of some commercial consignors to accept lower prices. “They’ve gotten a little spoiled,” he said.
Imagine controlling your used car inventory from anywhere. With the SmartAuction® mobile app, you can. ©2013 Ally Financial. All rights reserved. SmartAuction is a registered service mark of Ally Financial Inc.
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