Experts predict vehicle values to flatten in 2020

(From left to right) Lenny Sims, Jim Woodruff, and Scott Yarbrough at PowerSports Finance Summit 2019

SAN DIEGO —  Vehicle values will likely be flat in 2020, partly due to uncertainty surrounding the presidential election, executives from National Powersport Auctions, NADAguides and Black Book told attendees at PowerSports Finance Summit 2019.  

“Something we’ve been tracking for 40 years now is how the election affects the marketplace,” said Lenny Sims, vice president of business development and strategy at NADAguides. “Something that’s been extremely consistent — whether the business is good or bad — every time we head into an election year, we see things flattening out. Consumers tend to keep their hands in their pockets a little longer than normal because there’s just uncertainty. Flat is not necessarily a bad thing. We’ve had a good year.” 

The 2020 election could affect several economic factors that would trickle down to the powersports industry, but the “economy is doing great currently” with low unemployment and “the price point of new vehicles coming down relative to income,” explained Jim Woodruff, Chief Operating Officer of NPA.  

If there are few indicators that the economy will weaken in 2020, then “the sky’s the limit” for growth going forward, said Scott Yarbrough, editor of the Black Book official motorcycle and powersports value guide. 

Vehicle values for side-by-sides were strong in 2019 and will likely continue into 2020, Sims and Woodruff agreed. Smaller entry-level sportbikes are another segment that will likely grow in value next year.  

“The 300-cc segment is actually pretty strong,” Sims said. “There’s some great product there and affordable pricing. The interesting thing we’re seeing is the people that buy those and come back, they jumped right up to the big bikes. They’re skipping that 600-cc level now. And if that continues that way, then I think the sportbike market might be something to watch, as well.” 

Meanwhile, cruiser values have been weaker than other segments and will likely continue to see pressure into 2020, Woodruff added. 

Lenders and dealers should also keep their eyes on electric bikes, which could be poised to gain extra attention from new riders, according to Yarbrough. 

“It may still be a little early, but electric is something that really feeds into a number of changes that we see in society with people wanting to go with non-carbon-based forms of transportation,” Yarbrough said.

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