LAWRENCEVILLE, Ga.—After a couple of weeks of having their simulcast sales closed, the Automobile Dealer Exchange Services of America (ADESA) was able to reopen numerous locations last week.
As CUToday.info reported, the wholesale auction lanes first saw traffic slow down due to the pandemic, and then close as state mandates forced them to shut down.
Black Book reported that while some sites opened, sales rates at most auctions continued to be low.
“But there were pockets of strength with successful lanes that had conversion rates over 50%. The success appeared to be driven by a sellers’ reputation for quality vehicles and, in some cases, the pricing/vehicle mix availability,” Black Book said.
Typically, during an economic downturn, cheaper, fuel efficient cars retain their value better but, week after week, the compact and sub-compact segments have depreciated at a higher rate than other car segments, the company said.
As for trucks, the luxury segments have been consistently experiencing large adjustments, Black Book said.
Putting on Pressure
“New car incentives are putting pressure on used values for one- to two-year-old vehicles. There is also dealer hesitancy to take in these models on trade because of the uncertainty on how far the values will fall in the coming weeks,” Black Book said.
Dealers and remarketers continue to note the widespread demand for the lower-condition, higher-mileage, rougher units as they are at an attractive price point right now.
The dealers with sales departments that are open have experienced drastic reduction in foot traffic, but the conversion rates for the buyers they are getting is high, Black Book noted.
“The people that are buying right now are in a position of needing a vehicle as opposed to passively searching or wanting one. Many dealers are reporting that their Internet activity and leads have increased as consumers are at home and spending time researching their next vehicle,” the company said.