Fixed Ops 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.
  • 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 Price Trends:

  • Since May 1Pickup 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, the car segment declined by 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

  • The market still shows depreciation signs in the wholesale channel but a stabilization in the retail price.
  • Large independent groups like CarMax and Carvana are becoming active and increasing prices.
  • CarMax is sitting at 27% sub 22,000 and Drive Time is almost at 60% sub 20,000 What does that tell us?

 

Fixed Ops Service Trends:

  • The US Automotive Service & Repair Industry is expected to grow at a CAGR of 98%during the forecast period (2023-2028)
  • The United States Automotive Service Market size is estimated at USD 177.51 billion in 2023 and is expected to reach USD 237.33 billion by 2028
  • The average age of light vehicles in operation (VIO) in the US rose to 12.2 years this year, increasing by nearly two months over the prior year, according to new research from S&P Global Mobility, and expected to continue in that growth over the next 2 years.

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