White Papers

Our white papers and special reports aim to inform industry stakeholders on current and expected used vehicle price movement to better maximize today’s opportunities and manage tomorrow’s risk.

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2017 Q2 White Paper

 

Value Discovery: How Rental Fleet Sales Affect Residual Values

Every day a significant portion of vehicles sold in the United States do not pull into a residential driveway, but instead pull into rental lots to carry travelers to a vacation destination or business meeting. Calling this activity a heroic one for the automotive industry may be pushing it, yet it is important, nonetheless. The percentage of total new vehicle sales sold to rental companies is termed “rental fleet penetration” [RFP]. Each year roughly 1.5 to 2 million vehicles are sold to rental fleet companies, amounting to industry-wide RFP figures of 10% to 13%.
 
This white paper explores the brand characteristics that drive auto purchase behavior and their impact on used vehicle prices. Understanding these characteristics is critical for building intrinsic vehicle value and preserving revenue potential in an increasingly competitive market.

Topics Include: 

  • Used vehicle supply return distributions
  • Statistical impact of rental fleet penetration on used prices/residual values
  • Brand value and rental fleet penetration relationships
  • Brand reputation avoidance and rental fleet activity

To download the latest 2017 Q2 White Paper click here >


Previous White Papers

 

A brand’s name immediately brings to mind specific products or services, as well as their perceived characteristics — whether good or bad. It’s this reputation that ultimately determines brand value, or the premium consumers are willing to pay for products or services above and beyond their functional attributes. Read More Here >
 
Lenders often base their new vehicle loan thresholds on manufacturer suggested retail price (MSRP) or dealer invoice price. But these prices are static in nature and don’t reflect the ebb and flow of actual sales prices. Data predicated on real-world activity — such as NADA Used Car Guide’s New Vehicle Values — provides the guidance lenders need to more accurately assess risk and opportunity. Read More Here >
 
Used vehicle prices are usually discussed with regard to how wholesale or retail prices are moving individually, rather than how they’re trending in relation to one another. Focusing on just one or the other, however, leaves out valuable information that can enhance our overall understanding of the used vehicle market. Read More Here >
 
For decades, vehicle leasing has provided an appealing alternative to car buying, whereby monthly payments are made over a fixed term in exchange for use of an automobile. The consumer, or lessee, benefits because, in most cases, lease payments are lower than loan payments, as the amount owed on a lease is largely based on the difference between the manufacturer’s suggested retail price (MSRP) and forecasted residual value. The lessor benefits by earning income on the asset over the initial lease term and can realize additional revenue when the vehicle is returned and sold as used down the road.  Read More Here >
 
In the not-too-distant past, questions surrounding how well — and how long — a vehicle would hold up made dealing with used vehicles a risky proposition for many. For example, in the late 1990s, a 5- to 6-year-old car with 60,000 miles was typically entering the dreaded “repair-replacerepeat” period of its life.  Read More Here >
 
Credit and the sales of new and used vehicles are basically joined at the hip. After all, automaker captive finance companies were created to provide credit to consumers so more new vehicles could be bought and produced. Among many things, the Great Recession and the years since have reaffirmed the lesson that as credit conditions go, so go new and used sales.  Read More Here >
 
Automakers have a lot on the line when it comes to redesigning an existing model.1 They invest years of planning and millions of dollars in each launch with no guarantee the market will embrace their efforts. A miss can force a manufacturer to divert precious resources to fixing perceived shortcomings, while a hit can bring an entire brand to a higher level of success.  Read More Here >
 
Manufacturers of any product — from toys to medicine to automobiles — must create items that are, above all else, safe to use. Not only is this essential to long-term brand value and corporate success, but it’s also required by law. But while perfection is the goal, defects are bound to occur, especially in advanced products such as automobiles.  Read More Here >
 
The auto industry has dealt with its fair share of unforeseen obstacles over the past few years, some contrived by man and some the whims of Mother Nature. 2013 wasn’t entirely devoid of unanticipated events, but the period was inarguably tame when compared to the volatility of the previous three years.  Read More Here >
 
The role of incentives in the automobile business has changed considerably over the past 50 years. As in most retail industries, they were originally used as a tactic to help move stale product. In other words, incentives facilitated the sale of outgoing model year units and models nearing the end of their lifecycles, or they helped address supply-and-demand imbalances due to production miscalculations.  Read More Here >
 
It may seem hard to believe, but more than a hundred years ago, many early drivers considered electric vehicles a preferable alternative to automobiles powered by fossil fuels.  Read More Here >
 
Last year was certainly not without its challenges—erratic gasoline prices, drought, super storms and a fiscal cliff. But the automotive market weathered these conditions extremely well, becoming an inarguable bright spot in an otherwise overcast environment.  Read More Here >
 

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