Like many sellers of older-model, used vehicles, Westlake Financial Services experienced a dramatic improvement in resale prices during 2010. Following a flat 2009, Westlake saw a 30%+ year-over-year gain in 2010. Westlake’s primary vehicle segment, 2000-2005 model years, has seen considerable pricing strength over the past 18 months largely due to limited supply, consumer downsizing, and a slow improvement in the economy.

Westlake further enhanced 2010 results through targeted buyer promotions and the introduction of their BWC Gold certification program, spotlighting select, later-model vehicles. Westlake also recognizes the value of its auction partners in achieving superior results. This year featured implementation of the company’s scoring model for evaluating auction performance. This grading has helped us identify and address performance issues, and compare results across our nationwide network of auctions.

In breaking down the year-over-year changes, they saw a divergence between sedan and truck / SUV segments. While truck and SUV prices began showing strong improvement in May ‘09, prices on sedans didn’t recover until the fall with the Cash for Clunkers program. Price increases on trucks / SUVs have slowed since the second quarter of 2010 while sedans prices have trended higher against the weaker comparisons.

Heading into 2011, we expect prices on older used vehicles to remain strong despite a slowing rate of increase as the factors that have been moving the market for the past 2 years remain in place. Regionally, we expect to see particular strength in the mid-Atlantic and Midwest markets, as well as improving conditions in California. Only a shift in consumer behavior is likely to change this in the near-term but the backdrop of weak housing and labor markets, and still high consumer debt levels should inhibit any major shift toward new and near-new vehicles.

Bill Walters
VP of Remarketing