Dealers Paid More for Trades in 2013



BANDON, Ore. - 

As their used-car operations churn out stronger numbers, both franchised and independent dealers have been more willing to shell out extra money for the cars their customers bring to the lots, according to CNW Research.

In fact, when considering all 16 vehicle segments included in CNW’s data set, franchised dealers offered a weighted average of $10,406 in 2013 for trade-ins from customers shopping for new vehilces and $6,257 for trade-ins from customers looking to buy used, the firm said in its latest Retail Automotive Summary.

Those represent gains of 12.61 percent and 4.79 percent, respectively, from 2011.

As for independents, the weighted average of what they offered on trade-ins during used transactions last year was up 25.07 percent from 2011 at $3,707.

“While the comparisons are skewed because of the recession, the growth in used-car sales has spurred a boom in what they offer for trade-ins,” CNW president Art Spinella said in the analysis.

He would later re-iterate: “As pointed out, the comparison to 2011 is somewhat misleading because dealers were just coming out of the automotive recession and had more than enough consumer enthusiasm and volume to allow them to offer lower prices on trades.

“In some cases, the difference between 2011 and 2005 was as much as 40 percent lower,” Spinella continued. “That said, trade-in prices last year and the opening quarter of 2014 when including incentives are up substantially.”

Given the broad range of pricing and the varying degrees of change that exist among the 16 segments included in the set, it may also be useful to look at individual vehicle categories.

For franchised dealers taking in trades from new-car shoppers last year, the greatest increase (percentage-wise) in amount offered was within the compact pickup segment (up 39.9 percent from 2011), followed by the budget car segment (up 31.81 percent). Five other segments were up double-digit percentages and nine were up single-digit percentages.

Meanwhile, when franchised dealers were taking in trades from used-car shoppers in 2013, the amount offered increased by double-digit percentages on all but two segments (compacts, up 7.32 percent from 2011; near luxury, up 7.03 percent from 2011). The biggest jump from 2011 was for minivans, which were fetching 57.92 percent more as trade-ins. Lower-middle vehicles (up 56.97 percent) and budget vehicles (up 49.84 percent) weren’t far behind.

Independents, on the other hand, upped the amount offered to used buyers on trade-ins by double-digit percentages on all 16 vehicle segments.

The most significant increase between 2011 and 2013 was for the full-size pickup segment, whose trade-in offers were up 38.84 percent.

Offering additional context, Spinella said: “While the trade-in prices may seem low in general terms, note that dealers are confronted with many older vehicles that have long seen their prime. Many are slated for the wrecking yard or auction but will never go on the franchised dealer’s lot.”

COMMENT ON THIS STORY