Americans should see some relief soon with inflation reaching its lowest point since early 2023 to 3% in June. This has come from the slowing of gasoline prices, airline fares, used cars, and groceries.
The better news is this inflation tapering has not caused a spike in unemployment or signs of a deep recession. Last week we saw strong employment and wage numbers as well. All of which is good news for our economy and our automotive retail and service outlook.
New Car Outlook: Cox Automotive
Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of
Typical loan rates on new-car purchases have ballooned to 7%,
It’s all pushed the national average monthly auto loan payment to $729.
With all that data. New car sales are trending similar to 2019 numbers and are expected to remain strong/.
Used Car Outlook: Source: Manheim Data/Next Gear
The average used vehicle is 23% older and carries 13% more miles (68,671 vs 60,848
The average wholesale selling price of a used vehicle was 33% higher than in 2019
NextGear Capital, as used sales rate at 60.3 days per vehicle in 2023 vs 61.5 in 2019. People are buying cars
Fixed Ops Outlook: Source: xTime
The June Repair Order Volume was up 1.3% month over month from May but was down 2.0% compared to June 2022.
June’s Repair Order Revenue Index was down 1.3% from May’s upwardly revised reading and is up 4.3% year over year. The average revenue generated per repair order decreased by $7 off the revised record high set in April.
The economy is steady and keeping the feds at bay, for now.
The new car market is still performing well while the used car market is showing a better turn opportunity if we can manage a strict turn policy in the store.
The wholesale market is showing margin opportunities for dealers who get their cars to the front line fast.
Finally, with margins still being compressed absorption is critical to aged inventory extinction. The volume is there in both CPRO and Warranty work which required lane utilization and capacity balancing act.
Don’t forget, the back of the house is a captured market for quality used car acquisitions and new retail sales.
Principal Automotive Consultant