With General Motors providing rental cars to the owners of vehicles affected by its recent ignition-switch recall actions, there are bound to be effects in the remarketing world.

Black Book editorial director Ricky Beggs talked to Auto Remarketing on Wednesday about how, exactly, those outcomes might surface in the auction lanes.

To meet the strong demand for these temporary replacements for GM recall-affected drivers as the recalled cars are being fixed, rental companies will have to keep units in stock that they would normally be remarketing this time of year, he explained.

Plus, one has to consider all the cars within the rental companies’ fleets that have to be fixed, themselves, before heading to the wholesale market.

In the short term, this reduction of rental supply will have some impact on the current wholesale price strength, in that it will “hold that up just a little longer than normal,” Beggs said.

Now, consider the other side of the equation. When all the recalled cars are fixed, and the rentals subsequently make their way into the wholesale lanes, Beggs says this doesn’t just add more supply. It also brings in units that are higher-mileage and a bit older than usual.

This will soften prices to some degree, he said, but it won’t be drastic. 

Beggs sets it up like this. With the forecast for annual price depreciations being 13.5 percent, the even-line per-month depreciation would be a little more than 1 percent each month. (Granted, some months prices increase, and therefore, the price decrease would be stronger in other months).

He anticipates the fixes will be complete in about three or four months. So, instead of June and July having typical 1.1 percent to 1.2 percent depreciation, these months may see depreciation levels around 1.3 percent to 1.4 percent.

Beggs doesn’t anticipate an escalation to 1.5 percent to 1.7 percent, given that the rental car segment is just once piece of the used market.

He’s also quick to point out that these rental companies have “very sharp” remarketing professionals who will make smart decisions when it comes to wholesaling the cars. Rental companies will examine the various venues for remarketing, they’ll look at how many units they put out at any given time, and so forth.

Beggs says they won’t just “dump” all of their off-rental vehicles into the wholesale market all at once, but will do so gradually. And the mileage on these cars will likely be in the 28,000- to 32,000-mile ballpark (versus the typical 18,000 to 20,000 level), he explained.

This would be a far cry from the 48,000 to 50,000 miles that many off-rentals were showing back in 2010, when rental companies had to hold on to cars longer because they couldn’t secure replacement inventory, given the drooping new-car SAAR, Beggs noted.