The used-car price guide books get it wrong, says Doug Wolford, chairman of the Kentucky Auto Dealers Assn. “They say prices are down, but in the auction lanes, prices are high.” He offers up various reasons for that.
Consumers are keeping their cars longer, either to save money or because of problems getting auto loans. That extended ownership creates a used-car demand, increasing market prices.
Also many former franchised new-car dealers now are exclusively selling used cars. Their inventory needs boost values.
Yet the various guide books have set values that are unrealistically low, says Wolford of Neil Huffmanin Louisville.
He cites various examples, such as '06 Land Rover with 28,000 miles. The National Automobile Dealers Assn.'s used-car guide book valued it at $17,600. It fetched $21,800 at auction.
The low book values hurt dealers. As they hotly bid against each other, wholesale prices go up. But then customers, upon consulting the guide books, think the retail prices should go much lower.
“Dealers are losing millions of dollars,” Wolford says. “States are losing money, too, because the lower values mean they're collecting less in sales-tax revenues.”
assures him it will get it right this year.
Questions or comments about this column? Send us an e-mail at Dealers@wardsauto.com.