Customer Trade-In Negativity

Tyler Larson
I am an independent pre-owned dealership with 70 vehicles in-stock average. 2014 was the worst year for customers in negative equity. I have an incredible amount of down-trades and customers nearly $10,000 from retail upside-down. Is it going to get worse?
Nicholas Fisher
Yes. I just read a car and driver article that said loans 73-84 months are up 24 percent in 2014. Yikes.
Dustin Lyons
Time to focus on leases and lease returns.
Big Tom LaPointe
The bigger issue is there has been a shortage of pre-owned cars that kept values high, so the RATE of depreciation is going to increase to pre-recession levels. Combine that with the aforementioned long loan rates and it's another recipe for economic stress. At least compared to 05/06, lenders seem to be burying less negative equity, but even that is on the rise...
Grant Gooley
Exactly what Dustin said! I don't think this will get worse. Bad decisions were made in the early 2000's resulting in difficult financial times in 08'. This has carried on until now. Many of the dealers from our group made comments regarding better situations among customers this year. I think we can expect things to get better. Thats not to say it will ever disappear all together...
Megan Barto
I've also come across customers who trade their vehicles every 2 years (& DON'T LEASE) & yet are surprised they have $10k in negative equity.......... hmmmm

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