Lane watch: Suggestion to challenge your store’s ambitious Green Peas

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LAWRENCEVILLE, Ga. – 

Have a hot-shot Green Pea at your store who is itching for a spiff or other recognition you offer? Here is a suggestion based on the latest wholesale observations contained in the latest installment of Black Book Market Insights.

Ask the new dealership teammate to find vehicles that do not need much, if any, reconditioning and for a price that won’t make a huge dent in the floorplan resources.

That person likely will be hunting for a while since Black Book said this past week marked 15 consecutive weeks with the overall market values increasing.

Of those 15 consecutive weeks, analysts determined nine of them generated price overall increases of at least 1%.

“With the global microchip shortage and other supply chain disruptors forcing OEMs to alter their new car production, it is expected that this elevated market will continue throughout the summer,” Black Book said in the newest report.

“Remarketers are raising floors and holding firm with this knowledge that the supply is tight and will remain that way,” analysts continued.

And if those Green Peas think they found some vehicles at a decent price, perhaps ask them to take a closer look at the conditions of brakes and tires or body panels to check for scratch and dent needs.

“Conversion rates have been declining over the last few weeks as the quality of inventory being offered for sale continues to decline. It is getting harder for buyers to find average or better condition grade vehicles,” Black Book said.

“Condition of units has been the hot topic with buyers in recent weeks, as there are fewer average to clean units available,” analysts added. “When buyers do find one, they are having to pay top dollar to secure it.

“For everything else, their reconditioning costs are increasing to ensure they get the units retail ready,” Black Book went on to say.

If you’re worried about those Green Peas cleaning out the spiff account, here is more evidence of how difficult the challenge is nowadays.

Overall, Black Book said car values rose another 1.25% last week as five of the nine segments posted gains exceeding 1.00%.

Analysts pointed out that in recent weeks subcompact cars (up 1.15% last) and compact cars (up 1.56% last) generated the largest increases. But last week, the largest jump in prices came from the midsize car segment, which rose +1.62%.

“The luxury segment gains have slowed but are still large compared to normal seasonal patterns. Typically, these segments would be declining this time of year and rarely see increases, even during the spring market,” Black Book said.

“Sporty cars continue to see large week-over-week gains,” analysts added about those summertime rides that had an increase of 1.19% last week.

Meanwhile, Black Book determined value increases among the truck segment intensified last week as the overall level rose 0.98%. All 13 segments moved higher with five truck categories climbing more than 1.00%.

Leading the increases were subcompact crossovers (up 1.56%), followed by minivans (up 1.46%), small pickups (up 1.31%) full-size Trucks (up 1.22%), which have averaged a weekly increase of 1.39% during the last nine weeks.

“The luxury crossover/SUV segments have slowed the rate of gains,” Black Book said. “But for comparison, in 2019 these segments were declining.”

In other words, “Good luck Green Peas!”



Source : AutoFinanceNews