“All Things Used Cars” Auto Market Update 6-28-24

 

Economic Source

23% of U.S. adults say the economy is in excellent or good shape, down 5% from January but 3% higher than last April. However, the unemployment rate was reported yesterday to be above 4% again at 4.1%. If we can get energy prices down inflation will start falling more than it is not and make way for possible interest rate hikes.

Consumer confidence

  • Consumer confidence dipped almost 1% in June but was up 6.2% year over year. In recent months,
  • Consumer spending growth accelerated to 0.2% in May.
  • Personal income growth quickened to 0.5% from the prior month.
  • Employee compensation growth also accelerated to 0.6%

Manheim Wholesales Market Source

  • The 3-year-old index depreciated is slowing and was only 0.2% this week.
  • Luxury depreciated faster than non-luxury by .3%
  • Wholesale values dropped for all model years.
  • Lane efficiency increased some week over week and continues to run ahead of the last two years
  • According to Black Book, the estimated Used Retail Days-to-Turn is rising and is now at 45 days.

Retail Trending: Source

  • Used retail sales dropped as the CDK cyberattack impacted operations but sales rate increased in recent days.
  • Similar to used, new car sales dropped, for the same reasons.

Summary: Source

The used, used car wholesale value and retail price decline are moving closer together as reported by DealerTrack and Manheim suggesting more margin compression ahead.

The need for dealers to keep the cost of sales down by setting aging plans with a focus on growing overall dealership gross not just used car font gross starts with how you buy the car. That’s our topic today.