Better Used-Car Buys Found in the Big City, New Study Finds

According to a new study, used-car deals get better — hundreds of dollars better — as ya shopper heads toward the big city.

In all but two states studied in CarGurus’ latest survey, dealers within a 50-mile radius of a major city center offer better deals on their used-car inventory than those located farther outside that metropolitan center.

How much better? Some of the best city savings were found in New Orleans, at $770, Las Vegas at $641 and Atlanta at $606.

In California, New York and Texas — the states in the study with the highest populations — CarGurus reports finding prices at city dealerships at more than $500 less than at suburban dealerships.

Overall, CarGurus analysts reported an average price difference of $345 between used-car listing in cities and suburban/rural used-car listings within the same state.

“If you are looking for the best deal on a used car, head for the city,” said Langley Steinert, founder and chief executive officer of CarGurus. “Our data shows that dealers located in populated metro areas tend to price their inventory more competitively than dealers located farther outside the city. For suburban car shoppers looking for savings, it’s worth expanding your search to include city dealerships.”

Only two states studied bucked the city savings trend, CarGurus noted: In Indiana and Arkansas, suburban/rural dealerships offered consumers, on average, better deals on used cars than dealerships within those states’ major metro areas.

For this study, CarGurus applied its car valuation models to compare prices on millions of used-car listings offered at dealerships in and outside the top 50 U.S. metro areas.

“City dealerships” were defined as those located within a 50-mile radius of a major city center.

“Suburban/rural dealerships” were defined as those in the same state that were located beyond the 50-mile radius of the major city centers.

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Lexus Explains How Two New Store Positions Are Targeting Better Customer Service

Lexus contends it is “raising the bar again” in regard to customer service by partnering with its franchised dealers to create two new certified store positions.

Announced Thursday, Lexus explained the vehicle delivery specialist (VDS) will introduce customers to their new units and review the features of each model.

Meanwhile, the brand highlighted the vehicle technology specialist (VTS) will serve as a resource for customers who have any questions about how to use the advanced functions of their vehicle, including the new Lexus Enform telematics system. 

Lexus group vice president Mark Templin reiterated that when the nameplate was established 23 years ago, it was dedicated to providing the best customer service experience in the industry. Templin stressed Lexus’ commitment to that goal is reflected in its top position in the J.D. Power and Associates Customer Satisfaction Index for 15 years, including the past four in a row.

The Lexus boss thinks these new dealership staff members can keep Lexus at its current customer service perch.

“With the advent of more technology in luxury cars, customers often have questions about their navigation system, establishing a Bluetooth connection for their phone or managing other telematics systems,” Templin explained.

“While we’re happy to answer their calls, we think it will be much more beneficial to have experts at our dealerships who can establish and maintain relationships with customers to answer any questions about their cars,” he continued.

With the launch of the new 2013 GS, brand executives said training for the VDS and VTS positions is now taking place across the country.

To emphasize the importance of these customer-facing positions, Lexus noted it is applying the philosophy of “takumi,” or master craftsman, to their jobs. Dealership associates are trained to treat customer service as a craft and are given advanced tools to help them go the extra mile with customers.

Lexus pointed out much of the training for the dealership associates is accessed through interactive iPad apps. The product information apps, including one specifically for the GS and also for Lexus Enform, include training exercises and are available for customers to download. Or, if a customer prefers, the individual can use iPad features like Facetime to contact their dealership and receive a remote personal tutorial in their vehicle. 

“Lexus customers are becoming more and more technologically savvy, and we want our dealership associates to be able to communicate effectively with them throughout the sales, delivery and ownership process,” shared Vince Salisbury, Lexus College dealer training manager.

“Customers can access the information on their own, come in to the dealership or contact their dealership via phone, e-mail or iPad to get the answers they need,” Salisbury added. “The idea is to give them what they want, when they want it and how they want it.” 

In addition to providing technical training, Lexus mentioned it is training dealership associates to recognize verbal and nonverbal feedback to customize each customer’s experience.

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2012 Jeep Wrangler predicted to hold its value better than any other vehicle

Toyota, Subaru, Lexus get high resale marksFive years from now, Kelley Blue Book predicts, a 2012 Wrangler will be worth 55 percent of its current, new-vehicle price.

The 2012 Jeep Wrangler will hold its value better in five years than any other vehicle, Kelley Blue Book predicts.

The Wrangler has risen to the top of the compact SUV category in separate rankings by ALG and Kelley Blue Book, which predict future resale values.

Five years from now, Kelley Blue Book predicts, a 2012 Wrangler will be worth 55 percent of its current, new-vehicle price. That projected residual value put it at the top of Kelley Blue Book's compact vehicle category, up from second place last year, when the 2011 Wrangler's residual value was projected at 45.2 percent.

Kelley Blue Book named Toyota as it best resale-value brand, with a predicted residual of 40.5 percent, up from 38.5 percent last year. Lexus, with a predicted value of 37.9, up from 36.4 percent last year, was named best resale luxury brand. Jeep, buoyed by Wrangler, jumped to second place in the top 10 brand ranking, up from eighth a year ago. Scion, which didn't make the top 10 last year, climbed to No. 3.

Eric Ibara, director of residual consulting at Kelley Blue Book, says his company is "amazed" at how well Wrangler holds its value — and isn't sure why. It competes in a category with such vehicles as the Honda CR-V, Toyota RAV4 and Hyundai Tucson but is perceived as different from them, he says.

"We have some theories," Ibara says. "It's easy seeing those vehicles competing against each other, but there's not much competition for a Wrangler.

"Part of its popularity, we think, is just being unique."

Kelley Blue Book released its resale brand rankings as part of its 2012 Residual Value Analysis. Its predictions are for five years to reflect the typical length of new-vehicle ownership.

ALG gave the nod to Subaru as its mainstream brand winner at 50 percent, down from 53 percent last year.

Lexus was the top luxury brand in ALG's rankings

ALG released its rankings as part of its 13th Annual Residual Value Awards. Its predictions are for 36 months, the typical length of a lease. ALG would not release predicted residuals for top finishers in its vehicle segments.

Raj Sundaram, a senior vice president at DealerTrack Holdings Inc., ALG's former owner, is a consultant to ALG as it transitions to new owner TrueCar Inc. He says ALG set its overall 2012 model residual projections lower than it had set projections last year and the year before. That's because an uptick in leasing that started last year will result in more off-lease vehicles returning to the market in greater numbers, which is expected to lower used-vehicle prices in three years.

On average, ALG set residual values for nonluxury vehicles at 45 percent for 2012, down from 47 in 2011. On the luxury side, ALG set average projections at 45.5 for 2012, down from 47 in 2011.

"In 2014 toward the second half and in 2015 we do think supply will be a very different dynamic, higher than what we're experiencing this year and next year," Sundaram says. "We have brought our residuals down."

As in previous years, import brands dominate both companies' projected residual rankings.

You can reach Arlena Sawyers at asawyers@crain.com. Readers are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

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