Good News for Resale Values!

For the past 4 years, Chrysler management has been telling dealers that they will sell less vehicles to rental companies like Hertz and Avis.  These sales, known in the industry as "fleet sales" have long been used as a way for car companies to inflate their sales figures.  They are typically low (or no) profit for the company but they do drive the overall unit sales that many consumers see printed in newspaper headlines and are thus used to bolster sales numbers and maximize production efficiency.

It looks like those efforts are starting to pay off.  Over the past 2 years, Chrysler has drastically reduced the volume of fleet sales while increasing overall unit sales.  Translation:  we're selling WAY more cars to retail customers than we did before.  In fact, for the month of July 2013 Chrysler saw its fleet sales drop to 14,400 units, an 8100 unit decrease from the same month the previous year.  At the same time, deliveries to retail customers rose 21% year-over-year.  

How does this affect the consumer?

Fleet sales have a major impact on long-term resale value of new vehicles.  When rental companies are done with the car (2-4 years) they send them back into the market which can flood the market with cheap pre-owned vehicles.  If you purchased that same car brand new 3 years ago, your trade-in now has to compete with the rental car.  More supply = lower price.  

I'm glad that Chrysler is showing discipline in the fleet business.  It makes the cars that I'm selling more valuable and provides my customers with more long term value.  To read the full article, click or paste the link below:

Categories: New Inventory
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