And the price of used cars, already strong, has been pushed up by the presence of AutoNation, said Alan Helfman, general manager of River Oaks Chrysler Plymouth, Jeep Eagle. I think it's actually been good for the market. Buyers for the superstores need volume and have been purchasing wherever they can, including from River Oaks. The higher wholesale comes on top of strong consumer demand for used cars. An official of Big H Auto Auction, who preferred not to be quoted by name, said the wholesale price increase also can be explained by high seasonal demand.
Sales are always strong during the spring, especially after tax refunds arrive.
The National Automobile Dealers Association has suggested dealers be careful about how much they pay at auctions because the profit margin on used cars has been slipping since May 1996. One reason is higher costs of advertising. Competitors of superstores breathed a sigh of relief on unofficial reports that sales by AutoNation locations here have been a fraction of targets set by the company. Republic Industries spokesman Jim Donahue in Fort Lauderdale, Fla., said company policy is not to discuss sales by store or by city. Auto industry analyst Jeremy Anwyl of Santa Ana, Calif., predicts there is trouble ahead for AutoNation and Republic's chief executive officer, H. Wayne Huizenga.