NADA: How Franchised Dealers Hit by Recalls, TrueCar: 38.4M Used Cars Sold November 25, 2015

Trade-in Value Reduction from Open Vehicle Recalls Explored in Report

Jonathan Banks
Executive Automotive Anaylst
NADA Used Car Guide

A new report by NADA Used Car Guide studies what would happen if federal legislation were enacted governing what happens after vehicle recalls. The “Used Car Safety Recall Repair Act” proposed earlier this year by Sen. Richard Blumenthal, D-Conn., was voted down by a senate committee; but trade-in values could be impacted if similar legislation were enacted removing all vehicles subject to a safety recall from the commercial marketplace from the time dealerships receive notice of a safety recall until the recall is remedied.

Here’s an assessment of trade-in value reductions associated with open recalls

Average Trade-in Value Reduction of Recalled Vehicles Was $1,210:
Applies to vehicles studied in analysis for recalls initiated in 2014 to franchised dealers.

Average Trade-in Value Reduction Similar to Other Recalls from 2010 to 2013:
However, number of vehicles impacted by recalls was significantly less for these years.

Dealer-Sourced Cost Estimates Came from Survey of 800 Franchised Dealer Reps:
Included costs from shipping to out-of-brand dealer, and storing and insuring vehicle
waiting for repair.

New and Used Sales Revenue Could Reach Highest Level Ever in 2015

Larry Dominique
Executive Vice President

TrueCar thinks that sale prices for new and used vehicles will increase this year and push revenue to its highest-ever level. The company estimates the average transaction price (ATP) for a new light vehicle in 2015 will be $32,589, up 2.1% over 2014. Used vehicle ATPs are also expected to increase by 3%, and will likely exceed $16,678 in pricing. With these high transaction price levels and robust total market volume, used and new vehicle revenue should combine to exceed $1.2 trillion for the first time ever.

Read more about TrueCar’s forecast for 2015 new and used vehicle sales

Used Vehicle Sales in U.S. on Pace to Rise 3.8% to 38.4M Sold this Year:
This sales volume would generate $640B in revenue compared with $599.7B last year.

New Vehicle Sales Rose 5% in First Nine Months to Over 13M Units:
Strong performance with aging on-road fleet, confident consumers and solid economy reinforces TrueCar’s forecast.

TrueCar Raised 2015 New Vehicle Forecast by 200K Units to 17.4M Sold:
If it exceeds 17,403,216 sold in 2000, would be highest U.S. sales figure ever.

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