by Jon LeSage, editor, Used Car Market Reports
Here are a few interesting remarketing points from this week’s Used Car Market Reports…..
CNW Research President Art Spinella has a few more provocative points to make (similar to recent comments that incentives are being inflated) – new vehicle lease residual value forecasts are being overvalued 5% to 10%.
This is being done to get monthly payments lower and beat competitors in new vehicle sales.
Spinella also sees a connection between the leasing sales boom and CPO sales – a lot of certified pre-owned vehicles are coming from end of term leased vehicles; CPOs are most desired used vehicles on the market and are seeing sales grow dramatically.
Other remarketing analysts appear to be disagreeing with CNW Research’s warning; one of them being Craig Carrow of Fiserv, who says that leasing residuals are where they should be in a Skype video interview.
Lenders have risk share agreements with OEMs – the financial balance with banks is more in line with where it should be, he said.
In the weekly market report from Black Book, Editorial Director Ricky Beggs reported that declining gasoline prices are starting to show their usual effect on softening prices coming to fuel-efficient vehicles. Beggs had been noticing, for several weeks, that gas prices weren’t having their typical market influence.
Spinella is also featured in a video interview with even more provocative things to say. Here he takes apart the usual forecast numbers being placed on new vehicles – month-over-month and year-over-year have less meaning these days, he says. Seasonal adjustments aren’t as real as incentive adjustments.