The Replacement for Displacement: Rise of the Turbocharged Engine

Over the course of the past few years there has been a significant push by many automobile manufacturers to abandon the use of larger displacement engines in favor of smaller, more fuel efficient turbocharged variants.   The biggest driver behind the recent displacement downsize has been an effort to raise average fuel economy. Sure, it’s easy to increase efficiency by sacrificing horsepower and torque, but in order to maintain the high levels of performance that we have all grown accustomed to the utilization of turbocharged power plants is being used to fill the gap. Recently the ...

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Mid-Month Update: Used Depreciation Ticks Up; Typical Fall Softness Setting In

Market prices for all NADA segments declined by an average of 2.1% through the first half of October or just over a half-percent more than the 1.5% fall recorded over the first half of September. The increased rate of decline observed through the two weeks of October is normal for this time of the year when progressively softer prices are usually recorded through the better part of a given fourth quarter before prices pick back up again as the New Year approaches.   Downward new market price pressure stemming from 2013 model year redesigns of four of the segment’s top five selling mo ...

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Incentive Spending: Moving Progressively Lower

Those in the industry know that excessive manufacturer subvention of new vehicle prices was one of the most corrosive factors affecting used vehicle prices for the majority of the last decade. This was particularly true for domestic OEMs as they pushed production to compensate for legacy obligations. The immense sums of cash spent on incentives and non-product development-related expenses meant that domestic models ultimately brought to market were at times at a competitive disadvantage to their import counterparts; this of course meant that additional subvention was necessary to encourage a ...

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New Vehicle Spotlight Ford Escape: New King of the CUV Segment?

For the October edition of our Guidelines we’re going to take a closer look at the entire ultra-competitive compact utility vehicle segment, but for this blog we’ll focus primarily on the new Ford Escape. Currently Ford’s compact CUV is at the top of this segment and from the looks of things, Ford might have the perfect recipe for segment domination moving forward. Having sold essentially the same vehicle for the past 12 years, Ford finally redesigned the Escape for the ‘13 model year. It’s no secret that this platform was long overdue for a makeover, but considering its archaic design it’s ...

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Equity Growth Promoting the Release of Demand

In this month’s edition of Guidelines we included an article on the current state of used vehicle demand, and in it we discussed how multiple signs – retail sales, price growth, and intention indicators – point to continued, albeit slowing, growth in this area. We believe that one of the factors supporting demand is the positive equity position that consumers find themselves in with their current vehicle. It’s common knowledge, at least in the industry, that used vehicle prices have been on the rise and that depreciation has slowed over the course of the past four years because of deteri ...

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Mid-Month Update: Depreciation Maintains a Slow Pace

Elevated gasoline prices continued to have a minimal impact on used vehicle prices through the first half of September as compact and mid-size car prices declined more than their larger truck counterparts. Market level depreciation through over the first half of the month checked in at just 1.5% and overall prices continue to be abnormally resilient considering the steeper rates of loss normally witnessed over the period.  Historically the rate of value loss picks up through the fall, but so far that has not been the case.  By comparison, depreciation in July and August reached 2 ...

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Luxury Brand Performance: BMW New Vehicle Sales Fall Off 19%

August proved to be a disappointing month for BMW as total new sales fell off by 19% year-over-year. Looking at the luxury brand performance table below shows that BMW was the only luxury brand that failed to report a gain last month. Total sales for the brand failed to break the 17k unit mark, which was over 7k units less than last month’s top selling luxury maker Lexus, and nearly 6k units less than second place German rival Mercedes-Benz. This is the first time that Lexus has been able to surpass both of its German competitors in terms of monthly sales since December ’10. What exactly ...

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New Vehicle Spotlight: 2013 Ford Fusion

Some things seem to get better with age – wine, jeans…and the Ford Fusion sedan?  Clearly not the image typically conjured with the phrase and potentially a misnomer too since older versions of the model aren’t performing in any extraordinary fashion in either the new or used vehicle markets, but Ford has so upped the ante with its latest iteration of the Fusion that somehow the quote seems fitting. As Ford Motor Company is planning to launch its newest iteration of their bread and butter mid-size sedan late this month lets first take a quick look back on the previous generation’s ...

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Mid-Month Update: Higher Gasoline Prices Stir Little Change

Gasoline prices have jumped again over the past month-and-a-half, which means that used car and truck prices should have expanded and contracted like we’ve seen during previous fuel spikes.    Only this time around, things haven’t remained true to past form.  In fact, the recent 38 cent spike in the price of regular grade gasoline has done little to change the course that segment prices have been following since April. More specifically, over the past three months the 3.0% average rate of loss for compact and mid-size cars has led all others segments by a wide margin, ...

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New Vehicle Spotlight: 2013 Subaru BRZ and Scion FR-S

This past May marked the beginning of a new unique joint venture between Subaru and Toyota as the BRZ and FR-S (launched under the Scion brand) no-frills sports coupes went on sale here in the United States. For those of you unfamiliar with these models, the formula is brilliant and yet simple at the same time. Two door coupe, 2+2 seating, rear-wheel drive, 2.0-liter boxer four cylinder producing 200 horsepower, all starting for under $24,500. Subaru offers the BRZ in two flavors: Premium, which has a base MSRP of $24,495 and Limited which starts at $27,495. Automatic transmission is availa ...

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