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Toyota prices hold up at auction

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Toyota prices hold up at auction

For now, dealers are competing for fewer models

Arlena Sawyers

Automotive News -- February 15, 2010 - 12:01 am ET

Since Toyota Motor Sales U.S.A. Inc. suspended sales of its recalled vehicles, auction volumes of those vehicles are way down, and their prices have held up.

But that will change, analysts say. Guidebooks that track residual values have been trimming prices for the recalled vehicles. And when those vehicles begin to flow through the auctions again, the backed-up volumes could drive prices down, some analysts say.

For now, dealers are competing for the few vehicles that are available, driving up prices, says Jonathan Banks, senior director of NADA Used Car Guide.

"Right now, there are so few going through auctions, and dealers are still waiting on parts. They need to make money somehow. They have to be selling something," Banks says. "That's making a short-term positive impact on prices."

81 auctioned vs. 400

For example, AuctionNet data show that in the week ending Feb. 8, 81 2007 Toyota Camrys sold at the nation's auctions at an average price of $13,000, Banks says. In January, about 400 2007 Camrys were sold at auction each week, he says.

The average price is up from $12,150 for 2007 Camrys for all of January and down from $13,300 in the first week of February 2009. Banks says the 2007 Camry was expected to depreciate about $800 since last year.

AuctionNet, a database that contains 80 percent of all weekly wholesale auction transactions in the United States, is a partnership between the National Automobile Dealers Association and the National Auto Auction Association.

Prices in line with market

Ricky Beggs, managing editor at Black Book, says his data show that the prices of used recalled Toyotas are in line with the rest of the market. He says the average price of a 2009 RAV4 crossover in the middle of last week fell 4 percent since Toyota suspended sales of the vehicles Jan. 26.

In the same period, the 2009 Nissan Rogue fell 3.4 percent, the 2009 Jeep Liberty fell 1.1 percent and the 2009 Honda CR-V rose 0.5 percent.

NADA Guides will adjust the prices of used recalled Toyota cars and trucks for March to the lower end of the price ranges the vehicles sold for over the past month. Typically, the company would place values at the average point of the price range, Banks says.

When the recalled Camrys are repaired and released for sale through remarketing channels in large numbers, supply will surpass demand, pushing prices lower, Banks predicts.

On Friday, Feb. 12, Kelley Blue Book lowered the used-car values of recalled Toyota vehicles by 1.5 percent. It was the second time in as many weeks that Kelley trimmed those values in response to the growing supply of unsold Toyotas on dealer lots and at auctions.

On Feb. 5, Kelley, which makes weekly adjustments to its used-vehicle values, had lowered the prices of the recalled vehicles 1 to 3 percent.

Read more: http://www.autonews.com/article/20100215/RETAIL04/302159913/1132#ixzz0fcH2iSXV

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