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Price decrease for used vehicles could benefit automotive service centers

The North American Automobile Dealers Association has released projections indicating that the overall cost of previously driven cars and light trucks will go down in 2014 due to a variety of factors, which may be good news for service centers.

Owners of used cars are more likely to patronize independent auto repair and maintenance businesses as warrantees other incentives that drive dealership service expire, so the increased availability of used cars due to the lower cost may help increase volume. The NADA reported that some of the most significant price drops will be seen in later model year vehicles, because of variable production quantities put out by automobile manufacturers during the past decade.

Newer cars may cost less than older autos
Because the recession had a large impact on car and light truck manufacturing, cars available for resale made between 2006 and 2009 will be a tight market. Prices for these units will be much more even - to the point of almost remaining completely steady - than for cars made in 2010 and later. Newer cars being sold to second or third owners will see an average price drop of 2.5 percent year over year, although a variety of factors including popularity of model type and segment will strongly influence prices.

Service centers may be seeing an influx of car types like luxury models, subcompact cars and small utility vehicles because these autos were popular production types. As such cars reach the end of their dealer warrantees, they're more likely to be brought to automotive service centers by their owners.

In general, economic indicators including unemployment and overall economic health in the country are indicating positively and credit availability is trending in a good direction. These factors will likely contribute to increased used car purchasing in 2014.

Attracting used car drivers away from dealerships
CNBC notes that dealer guarantees of used vehicles have helped drive the market, which may mean that such purchasers are more likely to return to dealerships for service. Independent service centers can try to attract business from these consumers by promoting their expertise in repairing cars in certain market segments, produced by specific brands, or both. Specific certifications or experience should be highlighted, like a long history of successful work on luxury cars.

Service centers may also highlight other advantages - quick turnaround time, a broader parts sourcing network - to differentiate themselves and attract customers driving recently purchased used cars.