Successes and Challenges in the Resale of Alternative Fuel Vehicles: July 2001 - March 2002

Technical Report · Wed May 01 00:00:00 EDT 2002

DOI:https://doi.org/10.2172/15000726· OSTI ID:15000726

This report provides the outcome of Dorfman & O'Neal's effort to examine the resale market for automobiles as it relates to the resale of late-model, original equipment manufacture (OEM), alternative fuel vehicles. Auctions provide an exceptionally rapid, effective, and efficient market for the transfer of property between buyers and sellers at reasonable prices. The first automobile auction in the United States was successful because used cars were in reasonably constant supply, were uniformly packaged, and were easily graded for quality. Also, the auction had sufficient volume to significantly lower the handling and transaction costs for wholesalers and dealers. To this day, the automobile auction industry conducts business primarily with registered wholesalers and dealers. Except for the U.S. General Services Administration (GSA) auctions and some consignment auctions, nearly all automobile auctions are closed to the public. The auction system represents a near-perfect market, validated by the lack of statistical price differences in value of specific model cars between various regions of the country. However, specialty cars may be subject to arbitrage. The buyer purchases the vehicle believing that it can be sold immediately at a profit in another region. A variety of vehicle pricing services are available to serve the consumer and the wholesale automobile industry. Each has a different philosophy for collecting, analyzing, and reporting data. ''The Automobile Lease Guide'' (ALG) is clearly the authority on vehicle residual values. Auction companies continue to apply automated technologies to lower transaction costs. Automated technologies are the only way to track the increasing number of transactions in the growing industry. Nevertheless, people-to-people relationships remain critical to the success of all auction companies. Our assessment is that everyone in the secondary automobile market is aware of alternative fuel vehicles (AFVs) and is interested to watch how the wholesale market for these vehicles may develop. However, none of the industry representatives we interviewed appears to be willing to take a leadership role in this market. Exact figures are not publicly available, but the GSA is probably the largest reseller of bifuel and dedicated compressed natural gas vehicles. These vehicles number in the hundreds; the total number of vehicles disposed by GSA each year is more than 20,000. GSA representatives have stated that bi-fuel vehicles are selling at approximately 80% of Black Book'' national average and dedicated vehicles are selling at 60% of ''Black Book national average compared to gasoline-only vehicles.

• Research Organization: National Renewable Energy Lab. (NREL), Golden, CO (United States)
• Sponsoring Organization: US Department of Energy (US)
• DOE Contract Number: AC36-99-GO10337
• OSTI ID: 15000726
• Report Number(s): NREL/SR-540-31990; ACE-1-31089-01; TRN: US200401%%182
• Resource Relation: Other Information: PBD: 1 May 2002; Related Information: Work performed by Dorfman and O'Neal, Inc., Washington, D.C.
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
09 BIOMASS FUELS
10 SYNTHETIC FUELS
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
33 ADVANCED PROPULSION SYSTEMS
54 ENVIRONMENTAL SCIENCES
AUTOMOBILES
AUTOMOTIVE INDUSTRY
AVAILABILITY
BUSINESS
LEASES
MARKET
MARKETERS
NATURAL GAS
PRICES
PROFITS
RESELLERS
ALTERNATIVE FUEL VEHICLE
AFV
AUCTION
RESALE
GSA REMARKETING DIVISION
AUTOMOBILE AUCTION INDUSTRY
CLEAN CITIES PROGRAM
TRANSPORTATION