I’ve touched on the price increases affecting used SUVs and trucks before. But things are reaching almost epic proportions here in late August. Wholesalers stand around at auctions shaking their heads at the insane prices they’re paying—then raise their hands and push the bid even higher. When you see wholesale bids surpassing retail bluebook numbers by a thousand or more, though, you just gotta ask: how long can this continue?
I wish I knew, for these numbers are (in the short term, anyway), unsustainable. Out of a dozen used cars, trucks, and SUVs I’ve sold to clients over the past 45 days, only two where at or below NADA bluebook. And I wasn’t ‘ripping peoples’ heads off’ (as they say in the business); my clients helped me pick and buy these vehicles, and my profit averaged about $500 per transaction.
Thankfully these folk all had good credit and either owned trades with equity or had cash to put down; otherwise neither bank nor credit union would have touched them. Now that Cash for Clunkers has run out, prices may decrease, but for now, it’s tough sledding for all of us—dealers, brokers, and buyers.
These anecdotal stories are reflected in data from Manheim, the world’s largest auction company (see chart); and show no signs of drop.
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Now, there are plenty of vehicles priced at or below book. But many of these are models people don’t want, or—if they are hot items—cheap because they’ve been in an accident (all don’t show up on CARFAX) or have high miles, the wrong transmission, etc. If it’s clean and straight, it’s nigh on untouchable at auction.
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