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00:00:02
>> A recent glut of used cars flooding the market may be great for consumers, but it's not great for car makers. And it's one of the reasons that share prices for the Detroit Three, GM, Ford, and Fiat Chrysler, are stuck in neutral. Just a few years ago, the supply of lightly-used cars and trucks was tight, as automakers had drastically cut back on bargain leases during, and after, the great recession.
00:00:24
But according to estimates, the end of 2019, an estimated 12 million low-mileage vehicles are coming off leases, inked during the 2014, 2016 spurt in new auto sales. That deluge is good news for used car dealers, auto auction houses, and car buyers, who stand to benefit from a bountiful supply of high quality, off-lease vehicles rolling into the US market.
00:00:48
According to an Indiana-based auction service, used vehicle prices at auction fell about 3% last year, and should drop around 3% annually for the next couple of years. GM and Ford say prices for its used vehicles fell 7% in the first quarter, versus the same period in 2016. Still, automakers are not totally freaking out just yet.
00:01:09
In late April, GM CFO Chuck Stevens said off-lease were an issue, but insisted that, quote, overall the used car market is absorbing that supply.