Economic Outlook: Source

It’s projected that the economy will expand at a modest 1.4% next year and 1.8% in 2025.

Fed is delivering as many as six 25-basis-point rate cuts totaling 150 basis points.

Interest rates have a direct effect on consumer behavior, impacting several facets of everyday life as used car borrowing becomes cheaper, making large purchases on credit more affordable.

 

Wholesale Market Trends: Source: Cox Automotive

Wholesale depreciation slowed again this week, with 3-year-old models dropping only 0.1%. Lane efficiency bounced back after the Thanksgiving holiday. Used retail sales finished the month strong, with a sales rate that was higher than in most previous years. Like used, new car sales also finished the month strong, and days’ supply dropped to 53.

      • The 3-year-old index decreased to 87.4%.
      • Non-luxury is beginning to flat line and stabilize.

Deals to be had:

      • Luxury is decreasing at an accelerating rate.
      • And the sale prices continue to run lower than MMR (-1.30%) but to a lesser extent.

Dealers want inventory:

      • Lane efficiency rebounded from the Thanksgiving holiday and is following the 2021 trend.

EV: 

Prepare for POS Cash on the Hood opportunities in January.

You must be registered, and you must qualify the customer and the vehicle as eligible. A source in last week’s AMU.

Dealers can be electronically funded in 72 hours in most cases.

You can become a registered dealer, click HERE and navigate to the EV section at the bottom with the link.

 

Summary: Source

With lower prices on new vehicles and depreciation on used cars, affordability has improved despite the increase in rates. Affordability should improve more in 2024 as rates hopefully begin to decline as well.

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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