Economic Outlook: Source

Jobless claims so far this year are not showing any substantial change in trend, reflecting limited stress in the labor market.

Tax refund season is underway and already running seven processing days behind last year. Through last week 25% fewer refunds have been issued with the average refund showing an increase of 2% at $3,207.

The Fed remains patient on cutting rate policy, and their rhetoric has forced financial markets to adjust rate cut expectations to match their projections. Rates have moved higher in 2024 and sit near 23-year highs.

 

 

Manheim Wholesales Market Source

  • Week over week three-year-old values increased 0.3%. Luxury increased 0.1% and non-luxury increased 0.4%.
  • Wholesale values increased for all ages of vehicles; older model years increased the most.
  • Sale prices moving closer to MMR (-0.42%).
  • Lane efficiency increased ~3% pts weekly and ran close to 2023 levels.
  • Retail prices dropped some last week, and spreads continue to drop due to stabilizing wholesale values and dropping retail prices.
  • Despite low inventory, used retail sales continue at a strong pace. Days’ supply dropped to 37.
  • New car sales continue to trend higher than some previous years, but inventory also continues to build. Days dropped to 68.

 

Manheim Wholesales to Retail Trending: Source

  • The average spread is consistent for most model years, and both the $ value spread and % spread are slightly smaller than last week as retail prices have been declining.
  • The 1-year-old (2022 MY) % spread decreased by 0.10% from 10.72% last week to 10.62% this week.
  • The 3-year-old (2020 MY) % spread decreased by 2.12% from 14.86% last week to 12.74% this week. This is the biggest weekly decrease for a 3-year-old.
  • The 5-Year-Old (2018 MY) % spread decreased by 0.62% from 19.00% last week to 18.38% this week.
  • Total average % spread decreased by 0.78% from 20.37% last week to 19.59% this week.

 

 

Summary: Source

The Automotive Advisor Team research is showing that affordability is the number one driving factor in consumers’ decision to purchase during this tax season leading into the spring bounce. What the values of vehicles to purchase by automotive dealers growing weaker over a week in this current market, having an aggressive approach to finding and paying for the inventory you know turns well it’s critical.

 

 

 

John Ellis CEO & Founder of The Automotive Advisor Team, LLC

Author: John Ellis

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

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