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Powersports Business • November 2023 • 9

BY BRENDAN BAKER EDITOR IN CHIEF

At the height of the pandemic , pre-owned powersports units were difficult to get , as was nearly any unit , new or used . While the pre-owned segment has always been a strong driver of growth for powersports dealers , it has been falling back to normal levels lately as more manufacturers have solved their supply chain woes and delivered loads of new units to dealers nationwide .

We spoke to Ryan Keefe , vice president of marketing for National Powersport Auctions ( NPA ), about the latest trends in preowned and how they may affect dealers sitting on aged inventory . He says dealers need to move their older units as soon as possible and buy “ smart ,” meaning they need to focus on what they can sell and transfer the rest through the auction channel to get the most from their financing .

“ Pricing is more in line with the seasonal norm ,” says Keefe . “ So we ’ re seeing the typical ebb and flow of seasonal demand . The overall values are still elevated above 2019 due to inflation but have dropped significantly compared to the Covid high . Dealers are filling up with inventory and are much more selective about their used inventory .”

So what does that tell us ? According to Keefe , that means that dealers have more new units and haven ’ t sold through all of the used inventory they bought earlier this year . “ The floor traffic is not what it used to be , so [ dealers ] are being more selective . The turn time has also returned to pre-Covid turn times regarding how long something sits on the floor .”

Keefe advises dealers to get rid of aged inventory they bought at high prices in the spring quickly . “ Pricing is not going back up anytime soon , and you ’ re missing opportunities if you ’ re not getting into new products at the right price .”

Jim Woodruff , CEO of NPA , recently spoke about the importance and value of the preowned market during an online MIC Symposium that PSB sat in on in late September .

Woodruff says it ’ s vital for the industry to have a liquid channel for consumers and lenders to move pre-owned vehicles and turn them into cash to buy a new vehicle or write a new loan . “ The more efficient that channel is and the more efficient the dealer channel is , the healthier the industry can be , and the more new vehicles get sold .”

According to NPA data , pre-owned is the largest segment of the powersports industry . Woodruff says about 94 percent of the powersports vehicle population today is over a year old . But more importantly , he adds that on a transactional basis , there are about three times as many pre-owned vehicles sold as new ones . “ This is important because , in our industry , only about 3.4 percent of the population has a motorcycle . We would all like for more people to have one , and if we can sell them more new vehicles and sell them more used vehicles , the industry will be healthier .”

Do we have too much supply ? According to Keefe , there ’ s not too much supply at the moment , but some key benchmarks are coming up that NPA is keeping an eye on . “ Pricing is still falling , so we ’ re watching that close . We ’ re probably seeing the bottom now ( September ) and maybe a bit in October . Then , performance in the spring of 2024 will be the best indicator of the total supply in the market . There ’ s too much supply if we still see November or December pricing in the spring .

If it jumps back up to the pre-Covid 5−10 percent above what it used to be , then I would say supply / demand , in general terms , is balanced .”

The supply and demand issue hinges on the economy and consumer confidence . Consumer debt is at an all-time high , Woodruff notes , including automotive debt and student loan debt . And consumer defaults are on the rise . Even with solid employment rates now , if it weakens , there will be some pain ahead . But the powersports industry is outperforming other

See Pre-Owned Market , Page 10

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