All Things Used Car Market Summary 6-2-2023

The Automotive Advisor Team

ATUC –6-2-2023

Economy:      

·      Factoring in inflation, real spending increased 0.5% in April when it had been unchanged in March.

·      The income and spending data indicate that the consumer is alive and well.

·      Inflation is still a factor that could lead to further Fed rate increases.

·      The concerning trend here is personal savings.

New: 

·       Day supply is at 53 days and still 50% above last year.

·       Sales were up 30K over last week and running 15% above last year. 

·       That is continuing to push the average listing Price is $47,462, up 40 and now up 5% over last year. 

Used Cars:

·       Used day supply is 44 days and is still 5% below last year.

·       Sales were up to 32,000 over last week, still 3% below last year.

·       With that supply and demand, the listing price is staying strong at $27,183, up $73 over last week but 4% from last year.

Wholesale:

Wholesale vehicle depreciation accelerated again this week. The 3-year-old index depreciated by 0.6% to 103.5%. That’s 1.5% down in 3 weeks.

·  Lane Efficiency dropped again and is now hovering around 60%. That means 60% are selling the first run and 40% are not. At the height of the pandemic were ere at 80%.

·       The retail margin spread trend shows the sales price for 3year old models on average dropped by $74 but the wholesale price dropped by $193. That indicates margin stability in the short run.

Summary:  

Consumers are earning and spending. There are many opportunities ahead for growth and one example of that is the continued sales of used inventory up 38K a few weeks back and up over 32K this week. The acquisition is the key to retail and look-to-book will not tell the whole story. The call today around being creative in finding and appraising inventory will allow for margins that blend inventory demand schedules to have a strong 30-day sales rate.

The Automoive Advisor Team.

info@theautomotiveadvisorteam.com