Photo via Wikimedia.

Photo via Wikimedia.

Trucks and utility vehicles have remained strong in spring auction lanes, even though Pacific coast auctions have seen the used vehicle market soften in the past month.

"Trucks continue to lead the market, but have softened slightly in the past 45 days," said Bob McConkey, who operates DAA Northwest and DAA Seattle. "The SUV and crossover CUV market seemed to gain strength both on the domestic and import side. The truck market has been excellent for a long time and I feel that the retail marketplace is beginning to become more diversified, partially because of the high acquisition cost of trucks and the growing volume of high value off lease cars coming to market."

Overall used-car sales have been relatively strong this spring because smaller car values have been improving. The car market has improved compared to the truck market, because of the high cost of trucks and consumer demand for transportation coupled with "slightly more stringent financing parameters," McConkey said.

May is typically been a transitional month in the used-car business with a slight market correction that kicks in by the middle of April. This year has been less disruptive, McConkey said.

Buyers are seeking out "loaded" units, including high trim grades and included option packages. Retail buyers have become savvier about vehicle equipment.

"Ill-equipped units across every segment are just harder to sell," McConkey said. "It seems like buyers are more apt to accept higher mileage and older year models in lieu of newer base-equipped cars and trucks, even with the maintenance expense of the bells and whistles being a real issue as these fully loaded units age and wear."

A strong economy in the Seattle area and Pacific Northwest has helped bolster values, he said.

The auction business in Alaska is tough to compare to other markets due to its isolation from the Lower 48 states, but used trucks and utility vehicles sell very well in the state, said Steve Sautner, president of Anchorage-based Dealers Auto Auction of Alaska.

"Trucks and SUVs are not just a fad in Alaska, they are a necessity," Sautner said. "We use them hard in work and recreation. Even when fuel prices are high, they tend to hold their value."

The state has entered a mild recession, because the Alaska economy is so dependent on oil revenues, which have fallen due to oversupply in the U.S. Automotive retail sales have softened as a result, Sautner said.

The auction has seen a large spike in salvage and mechanically challenged units that's been driven by an increase in subprime lending and the repossessions that follow.

"Unfortunately, due to the high cost of reconditioning and over supply of salvage vehicles in Alaska,  these units can be a challenge to liquidate and often see multiple auction runs before they are sold.    Our market is also not very receptive to higher mileage units, as Alaska miles are perceived to be much harder on vehicles than the freeway miles put on in the Lower-48 states."

Editor's note: This is part of an ongoing series that goes beyond the numbers to provide a snapshot of market conditions in the vehicle remarketing industry in the Northeast, Southeast, Midwest, Southwest, Rocky Mountain and Pacific regions. The Pacific region includes Alaska, California, Hawaii, Oregon, and Washington.

About the author
Paul Clinton

Paul Clinton

Former Senior Web Editor

Paul Clinton covered an array of fleet and automotive topics for Automotive Fleet, Government Fleet, Mobile Electronics, Police Magazine, and other Bobit Business Media publications.

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