2005 NADA: USED SALES: CERTIFIEDS UP, OTHERS DOWN

Certified used-car sales rev up.

January 30, 2005— Auto Executive magazine reporteds that dealers’ certified used-vehicle sales grew 7 percent last year—a bright spot in an otherwise-tough year for franchised dealers’ used-car departments, Manheim chief economist Tom Webb said at a press conference Saturday. Overall, said Adesa’s vice-president of industry relations Tom Kontos at the company’s press conference today, franchised dealers’ used-car sales were down 1.3 percent in 2004.

“The greatest competitive threat came from the dealer’s new-vehicle department,” said Webb, because of the attraction of new-car incentives. In fact, customers often started out as used-car buyers and switched to new, rather than the other way around, as in the past.

New-car incentives also put downward pressure on used-car prices. That is continuing, says Kontos, but with incentives fairly stable, he does not expect used-car prices to drop further.

As expected, off-lease volume fell sharply last year, by 700,000 units. The decrease will likely continue for two more years before volume rises again in 2007. That’s in response to the current increase in leasing, which rose from 19.3 percent in January 2004 to 22.4 percent in November 2004, Kontos said.

Kontos added that the most promising area for growth in used cars is auctions with simultaneous live and online sales. “It’s about presenting the vehicle to more eyeballs