ADESA Report Provides Analysis, Benefits of Reconditioning Used Vehicles

May 27, 2003

Indianapolis-based ADESA Corp., an ALLETE company, has issued Global Vehicle Remarketing 2003, an annual detailed analysis of the state of the vehicle auction industry. The 80 page report is available from ADESA Corp. and will soon be posted on its Web site:

Spending a dollar on reconditioning used vehicles typically yields an incremental wholesale value of $1.25 to $2.00, wrote Tom Kontos, author of the Global Vehicle Remarketing (GVR) report. This is one of several findings from the report, which includes 60 graphs covering a wide range of topics relating to the $370 billion used vehicle market 9.5 million unit auction industry in the U.S., Canada and Mexico.

ADESA Corp., a wholesale vehicle auction and remarketing services company, conducted extensive analysis on reconditioning through its Analytical Services department. The “recon” study involved data collection on over two million vehicles with over four million reconditioning items ranging from a simple “Wash and Vac” to premium reconditioning that allows vehicles to meet manufacturers’ “Certified Pre-Owned Vehicle” specifications.

The analysis was isolated to vehicles sold at ADESA’s 40 U.S. auctions during 2002 and involved comparing vehicles that received reconditioning work with “like” vehicles that did not undergo reconditioning. “Like” vehicles in the study were vehicles of the same year, make, model, approximate mileage, sold in the same month, and within the same “market segment” (for example, off-rental, off-lease, or commercial fleet vehicles).

The report describes reconditioning as a “Win, Win, Win” for remarketers, dealers and consumers.

For example, remarketers such as automobile manufacturers and their “captive” finance arms, can elevate the value of the program cars and off-lease units through reconditioning. This gives consumers more equity in their trade-ins and facilitates new car sales. Dealers can buy reconditioned used cars at auction via their existing “floorplan” (inventory credit line) and thereby conserve working capital.

A certified pre-owned vehicle can be an entry-level vehicle into luxury brands that some consumers might not otherwise be able to afford.

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