Reportedly, dealership stores of retired rental cars have dropped in volume quite dramatically since November, as the automaker has reduced the number of these retired vehicles that it auctions to dealerships.
The purpose of withholding more retired rental cars? To protect prices, reports Auto News.
The automotive news outlet spoke to Tim Walters, who owns Walters Elkland Chevrolet in Pennsylvania. He explains: “The old GM would have taken a drubbing on those cars. Had they just flooded the market with those cars, there would have been consequences for residuals, which would have made it harder to sell new cars. I give them credit.”
This all came about partially due to recalls that necessitated the manufacturer to fix retired vehicles before they could be auctioned to dealers. This led to a surplus, which in-turn, drove prices down drastically. Walters cites an auction he attended where he purchased over 20 low-mileage retired vehicles, all of them 2014 model year examples, for $12,000 or $13,000 apiece. He was expecting to buy 4 or 5 cars.
But for those dealers who didn’t stock up when prices were low, retired GM program auctions are offering far fewer of the cars now – as low as 10 percent of the normal volume. There’s no telling when the number of available retired vehicles will return to its previous average.