What’s the reason behind fluctuating wholesale values?

Wholesale values fluctuated significantly throughout the past month leaving many of you wondering what this means for you, the industry, and why it is happening. Jasen Rice, President, and CEO of Lotpop and the host of Used Car Weekly on CBT, spent more than eight years training dealers on used car inventory management before starting his own company, Lotpop. He has his hand on the pulse of what’s happening in the market and joins us today to discuss wholesale values moving up and then back down again.

Wholesale runs about three to four weeks behind retail. By mid-August wholesale shot back up a little bit and people started scrambling. Rice says the hard part is feeling out how much wholesale is driving retail? It’s typically retailing driving wholesale.

Rice says there are plenty of factors including inventory shortage, consumer demand, and also hurricanes. He says the tricky part is, we usually go into a seasonal slowdown but it can lead to a false positive. Dealerships are positive about their inventory situation because it’s running light but the negative is, will the consumers be there? Currently, it’s a seller’s market which means what’s happening on your lot becomes a little more important.

Look at your last two weeks of sales multiply that by two, then carry to that says Rice. You don’t want to overstock. He says dealers will have to over-analyze their appraisal process and work their service drive. Always look at current sale rates and stay in tune with what’s going on with the market and the economy. Rice says you want to be where the customers are.

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