How To Find Car Wholesale Prices, used car prices nada.#Used #car #prices #nada


How To Find Car Wholesale Prices

When it comes time to trade in a car, you have to know cars wholesale prices. When pricing a car there are three distinct values: retail, private party and wholesale (otherwise known as trade in value). The retail price is the price a dealer is expected to charge for a car prepped and ready for sale. The private party price is the expected value when purchasing a car from an individual. The wholesale price is what a dealer will normally offer for a trade.

Learning more about used car wholesale prices can help you understand how dealerships purchase used cars for their inventory and help you leverage this information to negotiate a great deal at a used car dealership. It is important to remember that used car valuations are never set in stone and that wholesale prices may vary up or down significantly based on local or national market conditions. This guide will help you learn how dealerships purchase used cars at wholesale prices and how other expenses can raise a dealership s investment in a vehicle.

Buying a Car: Wholesale Price Explained

When you are in the market for a used vehicle, used car wholesale price may become a topic of discussion while you are at the dealership. Simply put, wholesale value is the amount that vehicles may be purchased for during dealer-only wholesale car auctions.

Wholesale value is impacted by vehicle availability, mileage and condition. As used car dealerships aim to make a significant profit on their used vehicles, wholesale values are much lower than the retail price of used cars. Just as they purchase at wholesale prices from an auction, similar values are offered when vehicles are appraised for trade-in at a dealership. Although the trade-in value is not equal to the wholesale value, they are similar enough to give you an idea of what a vehicle s wholesale value should be.

Let s say you see a 2007 Honda Civic LX sedan that sold at auction for $4,360. That would seem like a great price and it might be a vehicle that you would like to purchase from a used car dealer. However, before you dial your cell with your credit card in hand, think about this. A Honda Civic LX is a mid-line vehicle that should sell in the $8,000-$12,000 range, even at wholesale auction.

Determining Wholesale Value

When a car is traded in and doesn t fit the requirements to be sold on the dealers used car lot, it is normally sold at an auction. The wholesale price is determined by an average of the auction selling price and is adjusted on a regular basis and is the raw information on which used car prices are set. To find the wholesale price of a vehicle, take into consideration the overall condition of the car and use websites like Kelley Blue Book or NADA GUIDES to estimate the value. Pay close attention to the condition descriptions and be as honest as possible to get the most accurate value.

Another way to obtain the wholesale value of a car is to have it appraised by a local dealer. Be aware that they might inflate the value in hopes of selling you a car. If they quote a number higher than expected, be wary. One way to help to get the best possible price when trading a car is spending a little time prepping it a little time spent washing, waxing and cleaning the inside might gain a few hundred dollars more.

Additions to the Wholesale Value

While a dealership will attempt to purchase vehicles for the wholesale value or below, there are other fees that will increase the dollar amount the dealer-owned vehicle. These additions to the wholesale value are worth considering when you negotiate with a dealership and estimate their used car costs. The most common expenses dealerships incur after purchasing a vehicle are transportation, reconditioning, detailing and certification. Transportation costs vary wildly but the average vehicle that requires interstate transport will cost at least $500 to move.

Reconditioning costs will also vary by vehicle, as some vehicles will require no maintenance and others will require thousands of dollars worth of work. Prior to a vehicle being offered for sale, most dealerships will also complete a thorough interior and exterior detail that will have an internal dealership cost of between $100 and $150. If the vehicle will ultimately be sold as certified pre-owned, there will also be a charge of up to $1,000 for the extended factory warranty.

Subsequently, you will see why a dealership cannot normally negotiate as low as the trade-in or wholesale value of a used vehicle. The wholesale price is simply a guideline used by dealership managers as they purchase vehicles for their inventory. As a result, vehicles are shipped to and reconditioned at the dealership more than $1,000 of additional expenses incurred by the dealership before the vehicle is offered for sale.

There is no disrespect intended in this step, as it is quite difficult to interpret what the pricing you are seeing means. Let s say you see a 2007 Honda Civic LX sedan that sold at auction for $4,360. That would seem like a great price and it might be a vehicle that you would like to purchase from a used car dealer. However, before you dial your cell with your credit card in hand, think about this. A Honda Civic LX is a mid-line vehicle that should sell in the $8,000-$12,000 range, even at wholesale auction. If one sells for $4,360, you have to ask what s wrong with it? Is it a flood car? Is there a title problem? Is it a high-miler? What are the issues that have kept its price so low?


NADA: Used-Car Price Dip Not Sign of Overall Decline #very #cheap #car #insurance


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NADA: Used-Car Price Dip Not Sign of Overall Decline

By Matt Schmitz

June 12, 2013

Despite May’s 2.1% month-over-month dip in the average price of used cars and light trucks — the largest in seven months — the National Automobile Dealers Association says the used-car market is stable. According to the June edition of the NADA Used Car Guide, the average trade-in price for used cars and light trucks up to 8 years old slipped only $57 to $15,263 in May compared with the same period a year ago.

“A growing supply of 3-year-old vehicles is applying downward pressure on the prices of late-model vehicles,” Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, said in a statement. That increase is, in part, due to increased fleet and lease sales after 2009, when new-vehicle sales hit a 30-year low with fewer trade-ins occurring, he said.

Some markets have felt the squeeze of the higher supply more than others, Banks said. NADA estimates the late-model supply of midsize cars, as well as compact and luxury utility vehicles, has increased by an average of 16%, while the late-model supply for the overall market has increased by only half that amount. Trade-ins on midsize cars during the first five months of 2013 depreciated by 2.8% to $12,749, while overall market prices during the same period dipped by less than 2%, and prices for full-size pickup trucks increased 1%. Meanwhile, average prices of used luxury cars and utility vehicles have fallen 3.3% this year.

Banks insists there is little evidence of substantial declines in the overall used-car market. “With gasoline prices holding steady and consumer sentiment at its highest level since 2007, we’re expecting an above-average performance in June,” he said.

Used SUV Prices Increase in April as Luxury Cars Fall

More Used-Car News on Cars.com


Nada Used Car Price Guide #used #car #finder


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Nada Used Car Price Guide

Nada used car guide are actually pretty easy to find. You have to know how to make and model of the car you want to buy or sell and what the year of the car is. Make sure that you always have proper information when you are selling or buying the car because the prices are varying from state to state.

The Nada used car guides contain both buyers and sellers of used cars as to their details value. These guides can be use as a tool for the new car buyer to obtain the highest resale value a few years down the road. The Nada separated car prices into three categories based on the information that you provided such as option and overall condition.

Low retail is the first category that means that the person who purchases a vehicle in this condition should spend a bit of money into bodywork, mechanical repair, carpet or other interior parts will have wear as excess of its age.

Average condition of vehicle is included in second category that is called clean retail. Everything should be clean in your vehicle.

The last category is High Retail. You should maintain the vehicle clean from additional attribute and it should come with someone in sort of inspection or warranty.

There are also two types of NADA used car price guides. Consumer, end purchaser, uses the most types and banks, auto dealers, and insurance companies use another that. This should stand to no surprise at all.

A used car dealer expectation to purchase the same vehicle is much different from what a consumer would. Safety items such as tires and brake pads will often be replaced, in addition to a thorough detail of the vehicle to make it appealing for customers shopping the dealer’s pre-owned inventory.

Another significant factor affecting resale value, particularly in regards to a dealer trade-in, is the cost to recondition a vehicle for sale.


NADA Guide vs. Black Book vs. Kelley Blue Book #diecast #model #cars


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Throwing the Book at You: Which “Blue Book” Gets You the Best Deal?

“Blue Book pricing!”

“We’re selling below Blue Book!”

“Get true Blue Book value for your trade-in!”

Whether you’re buying or selling a car, or even just conscious these days, you can’t get away from Blue Book mania. At one time “Blue Book” value was a used car insider’s term like cream puff or cherry, but today the phrase is, er, all over the lot.

Born of the original restricted-circulation, dealer-only NADA guide of used car wholesale and retail values, the Blue Book has become one of the major merchandising devices of modern vehicle selling. From seedy used car lots, to new car dealers, to million dollar national promotions for major automobile manufacturers, they all claim to sell cars at or below “Blue Book.”

What, actually, is a Blue Book? Who started this whole arbitrary pricing bible? How accurate are they and how do they get their numbers? Most importantly, do they provide truly valuable information to help you get the best deal, whether you’re buying or selling new or used? Read on.

Although the real Blue Book goes by the brand name Kelley Blue Book. like Kleenex for tissues, the term has become generic for all vehicle pricing guides. There are three principal reference sources heading a wide array of vehicle pricing information available today through printed matter, the Internet, and high zoot communicators such as BlackBerries and Treos.

Kelley Blue Book

Eighty-one years old, this guide boasts that one out of three people who buy a new or used car in the United States use this service. Kelley Blue Book (often misspelled as Kelly Blue Book) collects its information by attending auctions throughout the country where it bases used car evaluations: Excellent, Good, Fair and Poor. From those, Kelley Blue Book then sets wholesale values based on what are called “front line” (as in traffic stopper) vehicles, which also includes costs for reconditioning, transportation and auction fees.

Why should Kelley Blue Book be the book you depend on for the best deal? They claim it is most valuable to you, because you can get a quote from a Kelley Blue Book in Steubenville, Ohio and it will be the same at thousands of dealerships across the country. This means that buying or selling, you’re getting a fair deal.

Nada Guide: Blue-and-Orange/Yellow Book

Spokespeople for the 74-year-old NADA guide say their book is superior to the others because the NADA book is the official data guide issued strictly for dealer members of the National Automobile Dealers Association (NADA) trade group, and it has access to totally exclusive data, such as dealer retail sales, and it analyzes additional data from more than 500,000 various points of sale and other market data.

They say the circulation of the NADA guide out-guns the competition by almost five to one. The wholesale and retail pricing listed in the NADA guide seems to be higher in some areas than Kelley Blue Book due to its preset standard that all trade-ins be in very clean condition. Since “front line” might not accurately describe your vehicle, (only 5 percent of trade-ins or wholesale vehicles are) be prepared to adjust your expectations downward from what the NADA guide says.

Black Book

The 52-year-old, widely-used Black Book guide is circulation controlled, restricted to dealers and financing sources. Unlike kbb.com and NADA.com, the Black Book Web site does not provide data, only links you to dealers. The Black Book is the only value guide issued weekly instead of monthly, reflecting the latest prices direct from actual or online automobile dealers.

Whereas other value books or value Web sites may break down value into WHOLESALE and RETAIL numbers or TRADE-IN, PRIVATE PARTY and RETAIL, Black Book truly specializes in WHOLESALE VALUE, determining the value of used cars within categories of EXTRA CLEAN, CLEAN, AVERAGE or ROUGH. Although the others also issue editions for special interest/classic/rare cars, the Black Book’s Cars of Particular Interest (CPI) value guide contains over 14,000 vehicles, dating from 1946 to 2007.

What Do the Pros Use?

According to Lynn Faeth, referring to the used car operation of his nationally-noted The Scout Connection dealership in Fort Madison, Iowa, “I use the Kelley Blue Book and the Black Book for used car valuation. But the Black Book CPI is my mainstay in determining the true value of any rare or unusual vehicle which I buy or sell.”

Seconding Faeth’s comment, is John Gorton who runs Gerton Auto Sales, a large, successful used car enterprise in Mt. Vernon, Indiana, “I use the Black Book — the electronic version — exclusively in my operation, because its used car pricing seems to be more accurate and up to date, coming out weekly instead of monthly.”

“The system I use,” adds longtime Southern California car salesman Roger Himmel, “combines checking value of a trade-in or used car purchase in Kelley Blue Book and the NADA guide, then telephoning wholesalers or other dealers to see what the value is to them. After all, for every thing I buy, I must find a buyer.”

Back to the books, since each of the three value data industry leaders claim to offer the most accurate information and the best deal to buyers and sellers, AOL Autos decided to investigate by researching the used car values of three different types of vehicles in each of the three books, Kelley Blue Book (KBB), Black Book and the NADA guide.

The Subjects

1998 Dodge Durango SLT: An older American-made hemi-muscles big iron SUV

2004 Honda Civic EX: A gas-squeezing highly popular late model Japanese sedan.

2002 Porsche Boxster S: German sports car.

All are in clean condition, all are standard factory equipped.

Here, based on the actual data in the May 2007 books and electronic data from these three sources are the AVERAGE comparisons. The first number is what the guides say you can expect selling or trading in your used car. The second column is the starting point for negotiations on what the used car dealer wants for the same vehicle, if you are buying.

Based on these numbers, it would appear that your lead sled Durango is going to fetch the prettier penny from dealers who favor the Black Book. If you’re buying, you want the NADA guide users.

You can also see that the differences of the Honda’s wholesale value could fit under a spare tire cover. But when it comes to retail, the Kelley Blue Book value is out there thousands of dollars over the other two.

It appears that you would get top buckster for your used Boxster from the Black Book gang, but if you’re shopping for one, the NADA guide-using dealer would appear to be your best bet.

However, remember these comparisons can change week to week (for Black Book), month to month (for the others) and definitely region to region. For example, in an earlier study, Black Book data showed lower wholesale values than the NADA Guide, but higher than the Kelley Blue Book numbers. Go figure.

In addition, situations can change. If gas went back to a buck a gallon, OK even two bucks, what would the Durango be worth then? Would the high-mileage wonders like Prius and the MINI lose their high esteem and growing demand cachets?

So, the bottom line as to which book to use is that there is no steady, set, fixed bottom line; they are all good, dependable, honest sources of information, some better than others for specific vehicles or markets or needs or purposes. When it comes to buying and or selling a new or used vehicle, you might say the best method would be to use a combination of a used car classifieds search, your judgment and these sources as your own value guide, remembering most importantly that they are guides, not the Magna Car-ta.


Nada car values – How to use Nada guides to get MAXIMUM trade-in dollars! #cars #for #sale #qld


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Nada Car Values

Nada Used Car Value

Learn to use Nada car values, Nada used car price guide to MAXIMIZE your trade-in value, research used cars with “Consumer Retail Edition” of Nada book is what this page is all about!

Nada stand for National Automobile Dealers Association. Nada Guides is another leading Used Car Valuation book you should get familiar with.

Depends on your physical location, and your local dealership’s preference. Some places used Nada book to determine Car Trade-In Value. they are different than Kelly blue book, you generally get HIGHER value for your trade than blue book value, so it’s in favor of you!

Nada car values information is OPEN to general public, unlike Black Book Value which is ONLY reserved for industry users like car dealers, financial institutions etc.

Nada car values guide is known for their BRIGHT orange color book that details:

* Average loan value

* Average trade-in value

* Average retail value

In different regions of the country. The numbers in the book reflect ACTUAL transactions at the dealerships.

Unless you are in the automotive industry, you wouldn’t be able to access the “The Official Used Car Guide” which is for dealer-only, thin pocket book published monthly.

However, there is a consumer retail edition of Nada used car price guide published quarterly, you can purchase through Online Book Store and research on used car market price in the United States.

Nada Used Car

Value Classification

Make sure you properly classify the car based on miles and options, conditions etc. Go to nadaguides.com and browse under Used Car section.

I’d like to remind you that even the values with NADA used card guide are very close to the dealer book value, this is still a guideline.

Be prepared to get a lower quote when you DO take your vehicle to a car dealership for Used Car Appraisal. Check out the used car valuation variables section to find out why you’re getting a low number than the book value.

If you are interested in knowing approximately how much is your car worth, go to NadaGuides.com and select the body style, vehicle make, year and model information etc for detailed pricing information.

Are you selling your car

to dealers or private parties?

If you are in the market of buying or selling your car with dealers or private parties. I strongly suggest you get a copy of

Nada Guide Consumer Retail Edition from Amazon Book Store. The book gives very clear instructions on how to determine the classification. Read it carefully so you don’t end up paying too much or selling for less.

One last thing I’d like to point out that you will see the loan value in the Nada used car pricing guide refers to what the bank will loan for the car.

Dealers know banks will only finance loan value. So the dealer will sell the car for loan PLUS X amount of dollars for ADDED PROFITS.

By having the Nada guide book in your hand, you are in a much better position to negotiated and WIN by the end.

Other Book Guide You May Not Know About

Did you know that dealers use Black Book to determine used car values and that’s the MOST common way to appraise used cars wholesale values.

If you live in Canada, used Canadian Black Book as the official guide.


Used Car Appraisal Calculator, Used Car Values, Nada Used Car Price Guide. #economy #car #rental


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Site Title / used-cars-advice.com

Used Car Appraisal Calculator, Used Car Values, Nada Used Car Price Guide

What Is Site Title : The site title is the text that appears in a browsers toolbar, is also by search engines to determine a webpage’s relevance to a search query and appears in results to search queries.

Meta Description / used-cars-advice.com

Your comprehensive used car values and pricing guideline online, used car appraisal calculator, nada used car price guide, nada guide used cars

How much time should I spend on meta tags, and which ones matter? What Is Meta Description : A brief description of each page, that can be a sentence in length, in a website that help search engines determine its contents.

In order for websites to get better rankings on a search engine’s results page, each page should have a unique meta description.

Meta Descriptions and Titles are given priority to be included as snippets that appear in results of search queries.

How much time should I spend on meta tags, and which ones matter?

Meta Keywords / used-cars-advice.com. Available

Matt Cutts Discusses Snippets What Is Meta Keywords : Keywords regarding the topics or the subject of the website.

Meta Keywords are a factor in helping Search Engines determine the content of websites.


Used Cars Values Nada #car #wheels


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used cars values nada

Latest new car prices, deals, used car values, dealer quotes CPO values. NADA Guides is the leader in vehicle pricing and vehicle information.Get new car truck MSRP, invoice pricing, used certified pre-owned (CPO) trade-in and retail values for all makes and models.NADA values for used car, truck, or SUV determine the proper NADA valuation for virtually any vehicle to ensure that you are making or getting a good deal.AutoTrader Once on AutoTrader s homepage, click on the Research Cars tab and then Used Cars. The AutoTrader offers car values as far back as 1981.Your comprehensive used car values and pricing guideline online, used car appraisal calculator, nada used car price guide, nada guide used carsVisit Business Site. NADA Used Car Guide values and auction data for lenders and dealers, as well as insurance, government and other automotive professionals.NADA s primary mission as the Voice of the Dealer is to advocate for dealers: to manufacturers, to Congress and the federal government, and to the media and the public.

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Latest new car prices, deals, used car values, dealer quotes CPO values. NADA Guides is the leader in vehicle pricing and vehicle information.

Get new car truck MSRP, invoice pricing, used certified pre-owned (CPO) trade-in and retail values for all makes and models.

NADA values for used car, truck, or SUV determine the proper NADA valuation for virtually any vehicle to ensure that you are making or getting a good deal.

AutoTrader Once on AutoTrader s homepage, click on the Research Cars tab and then Used Cars. The AutoTrader offers car values as far back as 1981.

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You are here: Press Room 2012 Press Releases NADA: Used Car Prices in 2012 Set to Peak in April

NADA: Used Car Prices in 2012 Set to Peak in April

McLEAN, Va. (April 10, 2012) Trade-in values on used cars are expected to peak over the next few weeks, said Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

While prices for all used-vehicle segments will remain stable over the next two months, compact and mid-size cars will appreciate in value and outpace other segments because of rising gasoline prices, shortage of inventory and strong consumer demand for fuel-efficient vehicles, Banks said.

Used values for the compact and mid-size car segments grew by an average of $300 or 2.6 percent from March to April, and values have grown by an average of $500 or 4.3 percent since the start of the year, according to the NADA Used Car Guide.

The most advantageous time this year to trade-in a used car will be April through May because values will be higher, Banks added.

Another factor that has contributed to the dramatic rise in used-vehicle prices over the past year has been an inventory shortage of popular models resulting from fewer off-lease vehicles returning to the market and fewer trade-ins.

The ongoing decline in the used-vehicle supply that began in 2009 has made it challenging for new-car dealers to consistently stock reliable, well-maintained used vehicles, Banks said. This means that dealers will be aggressive with trade-in offers for used vehicles that are in high consumer demand.

NADA estimates that the used supply of vehicles under five years in age has declined by 14 percent since 2009.

Clean, late-model used vehicles under six years old with reasonable mileage will command top dollar, Banks said.

The NADA Used Car Guide is forecasting that used-car prices will decline in June and the rate of decline will pick up over the second half of the year. Prices in June will be about 0.5 percent less compared to April; and July s prices will be about 1.5 percent less compared to April.

Over the past few years, the auto industry has gone through automaker bankruptcies and restructurings, a challenging economic environment and natural disasters which have resulted in significant seasonal volatility, Banks said. Last year, used vehicle prices remained high through July because of a new-vehicle shortage stemming from the natural disasters in Japan, which led to a spike in demand for used vehicles. This year, used-vehicle prices will return to a more normal seasonal pattern.

About the NADA Used Car Guide

Over a 79-year history, the NADA Used Car Guide has earned its reputation as the leading provider of accurate vehicle valuations and auction data. NADA offers a wide range of vehicle values, including those for used passenger car, light-duty and commercial truck, motorcycle, classic car and many more specialty vehicles. Available in a variety of delivery methods, NADA s products and services are used daily throughout the auto, finance, fleet-lease, government and insurance industries. For more information, visit www.nada.com/b2b .

The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealers, with 32,500 franchises, both domestic and international. For more information, visit www.nada.org .

Contact:


Used car prices nada #classic #car #parts


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Used Cars Prices Continue to Rise in 2012, NADA Says

Jonathan Banks

LAS VEGAS (Feb. 4, 2012) Increasing demand and a drop in the supply of used cars and trucks will lead to higher used vehicle prices in 2012, says Jonathan Banks, executive automotive analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

Consumers shopping for either a new or used vehicle will benefit this year from higher trade-in values along with loosening credit, Banks said at a press briefing during the NADA Convention and Expo in Las Vegas. For dealers, reliance on customer trade-ins will increase as they strive to meet the challenges of growing demand in a supply-constrained market.

On a seasonally adjusted basis, the NADA Used Car Guide predicts used vehicle prices will increase by 1.8 percent by the end of the year, peaking in April and May. Used vehicle prices increased 3 percent in 2011.

The slowing rate of depreciation on used vehicles over the course of the year will lead to even stronger trade-in values and enhance the equity that a consumer has in their vehicle, Banks added.

Banks said fuel prices hovering at $3.50 a gallon will increase demand for fuel-efficient compact and midsize cars with prices up by 2.7 percent and 2.1 percent, respectively, by the end of the year.

The NADA Used Car Guide predicts prices for large SUVs will increase by 1.4 percent this year.

A 15 percent drop year-over-year in the used supply of large SUVs will offset the elevated price of gasoline, he said.

The NADA convention runs through Monday, Feb. 6, at the Las Vegas Convention Center. For more information, visit www.nadaconventionandexpo.org .

About the NADA Used Car Guide

NADA Used Car Guide, over its 79-year history, has earned the reputation as a leader in providing accurate and comprehensive vehicle valuation products, services and information to businesses worldwide. NADA collects and analyzes more than 1 million combined wholesale and retail auto-related transaction prices each month. NADA s guidebooks, auction data, analysis and data solutions offer automotive, financial, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. For more information, visit www.nada.com/b2b .

The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit www.nada.org .

Contact:

Charles Cyrill


NADA Used Car Guide: Sales impact from major vehicle recalls – The Business Journals #used #cars #for #sales


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NADA Used Car Guide: Sales impact from major vehicle recalls

Estimated impact of recalls on Ford, Toyota and General Motors

PR Newswire

McLEAN, Va. Sept. 9, 2014

McLEAN, Va. Sept. 9, 2014 /PRNewswire-USNewswire/ — With more than 39 million vehicles recalled for safety-related issues through August, 2014 is on pace to shatter the previous high set in 2001 when 38.8 million vehicles were recalled for various defects.  While most recalls are simple, on some occasions a recall is serious enough to have a lasting effect.

NADA UCG explores the effect that major recalls have had on automaker’s new and used vehicle sales in its latest white paper The Impact of Vehicle Recalls on the Automotive Market.

“Research has shown that minor, well-handled recalls have an insignificant effect on automakers. However, cases involving a large number of vehicles, numerous reports of severe injury or death, and extensive media coverage can impact market performance” said Jonathan Banks, Executive Automotive Analyst at NADA Used Car Guide.

Brand perception prior to a recall – determine the severity of the damage. To illustrate this, NADA’s analysts examined the market impact of the high-profile 2000–2001 Ford/Firestone tire and 2009–2010 Toyota acceleration recalls, as well as the General Motors ignition switch recalls that have dominated industry headlines in 2014.

In 2000 and 2001 Bridgestone/Firestone and Ford recalled millions of Firestone tires to address tires that were failing prematurely on Ford sport utilities. The defect caused multiple deaths and captured media headlines for an extended period of time. Even so, the impact to used Ford truck prices was minimal.

“Although Ford’s competitive position was slowly getting better, consumer expectations of the brand were relatively low at the time,” said Mike Stanton, Vice President COO of NADA Used Car Guide. “By NADA Used Car Guide’s measurement, the Ford / Firestone tire recalls reduced the competitiveness of Ford’s used truck prices by just 2 to 3 percentage points at its peak. By 2002, Ford truck prices had essentially reassumed their pre-recall trend.”

By contrast, Toyota fared much worse when it recalled nearly 8 million vehicles for issues related to unintended acceleration in late 2009 and early 2010.  Unlike perceptions of Ford earlier in the decade, the universal perception of Toyota as a builder of high-quality, reliable vehicles led to a dramatic contrast between pre- and post-recall perceptions of the brand.

Before the recalls, used Toyota cars and trucks carried prices nearly 40% higher than those of direct competitors. Afterward, Toyota’s advantage over the competition was reduced to 30% – 10 percentage points below its pre-recall position.

General Motors’ ignition switch issue is the first recall event since Toyota’s with conditions grave enough to threaten brand value. To-date, GM has recalled 2.6 million compact cars globally for defective ignition switches that could be inadvertently switched off preventing airbag deployment in the event of a crash. Despite being associated with multiple deaths and intense media coverage, GM’s new vehicle sales and used vehicle prices have gone relatively unscathed.

“GM’s new vehicle sales are up 3% year to date and we’ve observed a just slight 1 to 2 percentage point decline in the competitive position of used Chevrolet car prices since April – discernible, but far short of the compelling evidence collected after Toyota’s recalls” said Jonathan Banks, Executive Automotive Analyst at NADA Used Car Guide.

Click here for the full report The Impact of Vehicle Recalls on the Automotive Market.

About the NADA Used Car Guide 

Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. NADA collects and analyzes over one million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b  to learn more.

About NADA 

NADA represents nearly 16,000 new-car and -truck dealerships with more than 32,000 domestic and international franchises. For more information, visit www.nada.org .