Car Dealer Cautioned not to pay too much

Kelly Blue Book is cautioning dealers during the months ahead to watch out and make sure they don’t “overpay” for fuel-efficient vehicles running through the auction lanes. Though high fuel prices have made these compact and subcompact gas sippers a hot seller and an attractive option for many consumers, Kbb.com contends “with so many new and redesigned subcompact and compact offerings available today, consumers will have little reason to pay close to sticker for a one- or two-year-old used vehicle.” And as wholesale values rise, the site’s analysts noted dealers will find it hard to make a profit when passing along these expensive used vehicles to shoppers. In fact, rising used-car values may have played a role in supporting the increase in new-vehicle sales in recent months, especially sales of fuel-efficient vehicles, officials asserted. We are suggesting that dealers avoid overstocking fuel-efficient units rather than shy away altogether. It will still be important to at least have a minimally sufficient inventory of subcompacts, compacts and hybrids available for sale, but dealers should make sure to try and maintain a less than 30 days supply,” Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book, told Auto Remarketing on Monday. “It appears as though fuel prices may have peaked, so we may see values of fuel-efficient vehicles begin to lose momentum in the weeks ahead. Dealers should focus on compact crossovers and mid-size vehicles as suitable alternatives. Values have remained relatively stable in each of these segments and we believe that these vehicles should remain in high demand, and thus, a safe bet for dealers looking for inventory,” he continued. And as wholesale prices peak, leading to higher used-car prices; and high fuel prices spur recent interest in gas sippers, Kbb.com asserts that OEMs will be rolling out even more fuel-efficient units in the months to come. “There shou ar. In addition, inventory is relatively light for a handful of existing fuel-efficient offerings such as the Honda Fit, Ford Focus and Mazda CX-5, so prices on these models will likely remain closer to MSRP than Invoice. As inventory increases, we would expect to see shoppers continue to opt for new vehicles rather than a 1 to 2 year old used unit,” Gutierrez noted, stressing that even more new fuel-efficient rides will be hitting the lots in the new future. Kbb.com analysts even went so far as to say “many one- and two-year-old used fuel-efficient vehicles are so expensive today that a comparable new vehicle may only be marginally more expensive.” Gutierrez added: “Consumers have more options than ever before when it comes to fuel-efficient offerings, and many of these vehicles can be leased for less than $200 per month and a small down payment. “Dealers must keep this in mind as they continue to pay more and more for used compacts at auction. As values rise, dealers will find it difficult to pass along the premium paid at auction to consumers,” ld be at least a handful of additional fuel-efficient vehicles coming to market in the months ahead. The Chevrolet Spark, redesigned Ford Fusion, and Dodge Dart are just a few of the fuel-efficient offerings that should be arriving later this year.see the full article at http://www.autoremarketing.com/

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