Market Trends

A Seasonal Remarketing Strategy Will Minimize Vehicle Depreciation Expense

March 4, 2001

by Mike Antich

An easy way to do this is by timing your vehicle replacement to coincide with seasonal highs in the used-vehicle market -- when vehicles are bringing top resale dollar.Leveraging Seasonal HighsMany new fleet managers may not realize that used-vehicle prices have seasonal highs and lows. There are certain times of the year when you will get the maximum resale dollars for a vehicle.So what are the hot months for vehicle remarketing? Traditionally, the best time to sell used vehicles is in the fall (September to November) and the spring (February to May). During these months, resale values may increase as much as 20 percent, as opposed to selling the identical vehicles in winter or summer.The worst time to remarket vehicles is from late November until mid-February. Why? A lot of dealers are reluctant to put used vehicles in their inventory prior to the first of the year because they have to pay inventory tax on them. Also, as cold weather and the holiday season approach, there is a decrease in the number of buyers in the market. With more inventory than buyers, wholesale prices soften. As a result, dealers try not to carry a lot of used inventory during the winter. The exception is used 4x4 sport/utility vehicles, which usually sell well during winter months.In late February, used-vehicle acquisitions by dealers in the wholesale market usually begin to increase. After the winter season ends, dealers sell out the remainder of their inventory and are once again hungry for used vehicles. That's why the wholesale spring used-vehicle market is so strong.Also, keep in mind that certain categories of used vehicles have their own seasonal selling cyles. For instance, demand for used minivans is strong just prior to summer because this is the traditional vacation period and families are eager buyers of these used vehicles. On the other hand, full-size sedans traditionally are in high demand in October and April.Knowing this, you can control vehicle depreciation costs by simply timing your vehicle replacements to take advantage of seasonal market highs and avoid seasonal lows. Avoid selling vehicles in mid-December through January because there is very little demand for used vehicles at that time of the year. Not only do vehicles take longer to sell, but they also sell for less. As the chart illustrates, the increase in resale price for a 1999 Taurus is $1,880 by remarketing it in October rather than in February, and $705 more for a 1998 Taurus.With a minimum amount of effort, you can lower your depreciation costs by simply remembering that fall and spring are the best times to sell your used vehicles.Let me know what you think.

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Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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