ALG Report: Used Market Supply Outlook on the Rise; Current Incentives Up

Upward trend in U.S. used car supply continues to affect values

SANTA BARBARA, CA--July 3, 2013: Residual values for automobiles are changing little edition-over-edition, according to the latest ALG Industry Report, but the outlook on used market supply has increased, which may lead to lower values in the future. The ALG Industry Report, which summarizes the forecasted residual values for automobiles by providing a look at factors impacting vehicle valuations over the next 36 months, is now available to the automotive and financial services industry.

The ALG Industry Report details a rise in new vehicle supply in two vehicle segments, Midsize and Compact cars, which result from numerous redesigns that have occurred. With current incentive levels rising around $200 in the industry overall versus the previous edition, this data could portend a drop in future values for those segments.

"Historically, when we have seen supply increase in specific segments, it puts downward pressure on residual values," said Eric Lyman, ALG vice president of editorial. "This is something we're watching closely, as today's sales battles typically contribute to lower prices and values."

The Industry Report includes a macro look at the U.S. economy and factors that can impact vehicle pricing – including gasoline prices, durable goods spending and used car inventories. Other measures of the nation's economic health are considered, including job reports, consumer confidence and unique or one-time factors, the impact of which may affect used vehicle values moving forward.

The next edition of the Industry Report will be available during the first week of September. To obtain a copy of the ALG Industry Report, or for more information about ALG and its products, visit ALG .