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NADA’s Chief Economist Provides Economic Update

May 10, 2007

Paul Taylor, Chief Economist at the National Automobile Dealers Association (NADA), will be providing monthly economic updates to NJ CAR and other automotive trade associations across the country. The Coalition will pass this information on to its dealer members through periodic NewsLetter articles and postings on the NJ CAR Website (

Key Used Vehicle Segments Gain Value, Despite Gasoline Prices

Gasoline prices are currently on the rise, headed over $3 per gallon in some markets and that will change slightly the mix of new light vehicles selling. However, despite the higher gasoline prices, currently, the value of used trucks, SUVs and large sedans is rising. This helps trade-in values looking forward and strengthens the market.

The overall average used vehicle price and trade-in equity of new car consumers have been increasing for four months. NADA and National Auto Auction Association AuctionNet Data show increases in used vehicle values in almost all categories, despite the high gas prices.

The Economy Ahead

Rates appear to be on hold by the Fed, and real economic growth closer to 2 percent for several months can be expected. Improved stock market values, if corporate earnings retain strength, will continue to assist luxury vehicle sales, which were down 2.4 percent in the first quarter of 2007.

March orders for motor vehicles from manufacturers increased 3.3 percent, which should assist higher vehicle retail sales in future months.