Trends Indicate Car Sales Will See a Drop in October
11/10/2013
The Cap Black Book, Live, one of the most trusted sources in forecasting for the car sales market and the most recent reports from the book indicate that car sales are about to go down. The forecast on list for the month of October from Cap’s Black Book Live is showing that used car values will experience a decrease month over month from September to October. Trade-ins about to reach the market will have less value for those offloading them to used car dealers and less value to the dealers who are turning them around and selling them. With plate-changes ahead after the end of September, the amount of used cars on the market will increase, and with high supply, without a matching high demand, values will continue to decrease.
At the same time, however, the Cap’s Black Book Live does not anticipate that the downward trend will last or that it will have a significant impact on the market overall. Company representatives indicated that there will be small downward movements in the overall trend for cars that are used as trade-ins, and this means that the upward trend that was seen in the marketplace in September will be wiped out of the record for the year. If the trend decreases values further than anticipated by Cap’s Black Book, the outlook for the remainder of the year may not be as bright as anticipated back at the beginning of September.
Values remained strong throughout the entire month of September, although the reports indicated that some values rose on certain vehicles throughout the month of September. A significant rise in the values of some vehicles during the month of September was indicated in the end of September report as unusual since vehicle values typically remain stable or reduce during this time of year. Indicators in the report showed that the low volume of used cars and cars used for trade in during the month of September along with strong demand for a low supply are typically what keeps the price baseline strong for the month of September each year.
The demand was so high throughout the month of September that dealers were reportedly purchasing vehicles that normally they would not purchase due toe the lack of supply and the increasing demand. Incentives on trade-ins during the month of September meant to drive sales of newer vehicles also caused significant problems with trade-ins during the month because many people with lower incomes were trading in lower quality vehicles to lower the cost of their newer vehicle.
Reports made to Cap’s directly from retailers in the marketplace indicated that more than 33 percent of the vehicles received on trade in during the month of September were not suitable for dealers and retailers to turn out to put on the market for profit. This could have added to the bleak outlook for October since dealers were left with more cars that they may be unable to sell.
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