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Pre-owned pricing stable throughout ’11

Dave McMahon, Senior Editor
March 12, 2012
Filed under Features

Sport, cruiser segments follow seasonal patterns

National Powersport Auctions data provided to Powersports Business shows 2011 pricing was more stable throughout the year compared to most years, particularly for motorcycles, according to NPA chief operating officer Jim Woodruff.

“It’s most likely due to some resurgence in consumer demand combined with tighter supply,” Woodruff said.

ATV pricing continued to soften in 2011, though at a slower pace than in previous years. Woodruff credited the pricing trend to a lack of retail financing in the ATV segment compared to others.

The NPA data in the accompanying charts shows the powersports auction product seasonality. NPA officials analyzed the average price and volume trends for common powersports product categories, with data drawn from approximately 300,000 NPA non-factory sale transactions for the five-year period from 2007-11. The majority of sales are bank repo units and include dealer consignments. The data does not include factory sales and certain product lines, including scooters and side-by-sides. The condition rating is not taken into account and assumes the condition mix is constant over time.

The Average Sale Price is provided on the chart, with the percentage denoting the price compared to NADA Guide’s Clean Wholesale book. Pricing and volume vary 5-10 percent throughout the year, and pricing can also vary as much as 5-10 percent year-over-year in a given month.

“Prices generally rise 1-3 percent year-over-year as MSRP values rise,” Woodruff said. “2009 was an exception, where prices generally dropped during the recession as demand waned and supply peaked.”

Source: National Powersport Auctions

As the graphic shows, both pricing and volume peak in spring. Those trends are driven by the typical powersports selling season and consumer payment habits. “It’s actually good for both dealers and lenders/consignors,” Woodruff said. “Banks get top dollar when supply is highest and dealers have more product to choose from when they need it most. The price spikes would be much greater if volume declined in the spring.”

Here’s how Woodruff breaks down the five-year pricing trend of the powersports segments:

• Sport and cruiser – They behave as expected, with strong pricing in spring and weaker in fall, in synch with the selling season.
• Utility ATV – They have the least variance; after a slight peak in spring, their pricing stays fairly stable throughout the year.
• PWC – They have the greatest variance, with a slight delay in the peak closer to summer.
• Sport ATVs and off-road (MX) products – They tend to have a high variance, with strong peaks in spring and steady declines into fall and winter.

Source: National Powersport Auctions

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