January 6, 2014
www.usedcarnews.com
ON THE WEB: Used Prius Prices Vary
Across the largest U.S. cities, the pricing difference between the least and most expensive city to buy a used Prius is 15.5 percent, according to a study by iSeeCars.com. The city to buy the cheapest used Prius is Miami, with an average price almost 9 percent below the average price nationally.
Use Caution When Considering Salvage
Carfax Claims That Rollbacks Rampant
Carfax claims that more than 190,000 cars have their odometers rolled back every year. Carfax finds that at least 50,000 miles are taken off the odometer in the majority of rollbacks. In addition, 14- to -15-year-old cars are most susceptible to a rollback.
Classic Car Auctions Outperform Last Year
TEMPTING: An increase in total loss declarations by insurance companies means more scenes like this: cars with less damage heading to salvage sales. But a recent study shows the opportunity exists for very few.
The RM group of companies realized $442 million in auction sales this year. The sales figures bested the companies’ 2012 performance by more than 20 percent and included 3,932 vehicles presented at 16 events.
By Ted Craig
The number of vehicles declared total losses by the insurance companies should climb this year, but dealers should resist the temptation of these drivable salvage vehicles. Mitchell, an insurance industry technology provider, projects an increase in colli-
sions combined with softer used-car prices means more total losses. These total losses will include many cars with repairable damage that could be sold with salvage titles. But a recent study by DamageMax shows the title brand matters more than the condition of the car. The study found salvage
branded vehicles were worth only a third of those vehicles with clean titles. Dealers still interested in selling these vehicles need to take the proper approach, said Michael Lasini, DamageMax’s founder. First, they should sell these units as-is. “The imagination is always far worse than the
truth,” Lasini said. Second, dealers should expect to finance the vehicles themselves as most finance companies avoid salvage vehicles. Cars with salvage titles can work for buy-here, payhere, Lasini said, because the buyer’s main concern is transportation. Mid-size cars are the best choice.
Rush - Dated Material
CarMax Reports Another Quarter of Record Results CarMax Inc. reported double-digit growth for its latest quarter ended Nov. 30. Total used-vehicle unit sales grew 15 percent and comparable store used units grew 10 percent vs. the prior year’s same quarter. Comparable store used unit sales benefited from improved execution in the chain’s stores and an attractive consumer credit environment, as well as a modest increase in store traffic, CarMax executives stated. Wholesale vehicle unit sales grew 4 percent compared with last year’s quarter, reflecting the growth in CarMax’s store base. Other sales and revenues declined 5 percent year-over-year.
Extended service plan (ESP) revenues were similar to the prior year, as the increase driven by the growth in CarMax’s retail vehicle sales was offset by an increase in allowance for ESP returns. The rise in the allowance reflected increases in ESP cancellations prior to the end of their contract term. Net third-party finance fees declined by $4.6 million as the third-party subprime providers originated 18 percent of used vehicle unit sales in the current quarter vs. 15 percent in the prior year’s same quarter. Over the last two years, the volume of this financing has increased.
Imagine controlling your used car inventory from anywhere. With the SmartAuction® mobile app, you can. ©2014 Ally Financial. All rights reserved. SmartAuction is a registered service mark of Ally Financial Inc.
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