All Things Used Cars Economic Outlook: Source

  • Discretionary spending is increasingly tilting toward experiences outside the home, especially among young adults.
  • While residual strength in the labor market continues to support household finances, certain groups — including lower earners, student debt holders, and parents — are experiencing growing budgetary pressures.
  • Baby boomers (60-75) tend to be the most price-sensitive and more likely than younger generations to trade down. Still, Gen Zers (20s) have recently been experiencing elevated levels of sticker shock and substitution.
  • High prices for big-ticket purchases like housing and autos have dampened consumer demand as affordability continues to be an obstacle.
  • The good news is Gas prices have fallen or remained steady since Sep. 19 — marking about a 70-day trajectory of decline, Andrew Gross, spokesperson for motor club AAA, said Tuesday.

Retail Sales Trending: Source

  • U.S. new vehicle sales are expected to surge by 10.2% at November’s close from improved vehicle availability with the average price at $45,332.

Retail Price Trends: Source

  • Pickup Trucks according to Carfax have dropped by $2,500.
  • Used Luxury SUVs dropped by roughly $400 from last month.
  • Used Cars including sedans, coupes, and wagons – dropped by $300.
  • The average price of used SUVs and Luxury Cars dropped by roughly $200 each.

Wholesale Market Trends: Source

  • Overall car segment declined at 2% in the last 2 weeks.
  • 0-to-2-year-old cars dropped by 1.52%
  • 8- to 16-year-old models dropped by 2.10%.

 

Summary: Source

  • The market is still showing depreciation signs in the wholesale channel but stabilization still in the retail price.
  • Large independents like CarMax and Carvana are becoming active and driving up prices up.
  • CarMax is sitting at 27% sub 22,000 and Drive Time is almost at 60% sub 20,000 What does that tell us?
John Ellis CEO & Founder of The Automotive Advisor Team, LLC

Author: John Ellis

Founder & CEO The Automotive Advisor Team, Inc. BEVEveryting, Inc. Double E Consulting, Inc.

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