The Automotive Advisor Team


The U.S. government on Thursday is expected to report the economy grew at a 1.8% annual pace in the second quarter, according to economists polled by Reuters. Despite that, the Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, citing still elevated inflation as a rationale for what is now the highest U.S. central bank policy rate in 16 years. In the most recent economic projections from Fed, policymakers expect at least one more quarter-percentage-point increase would be needed by the end of this year.

New Car Outlook

Both the new and used markets show only minor changes this week. However, it does seem that there is some weakening in the new market with sales pace and price dipping just slightly. On the used side, prices continue to hold down slightly from last year, but sales continue to show relative strength. Used sales are flat compared to this same week last year.

  • Days of supply is 53, down one from two weeks ago. DS is relatively stable and has remained in the mid-50s range for most of this year. DS is now 49% above last year.
  • Available supply is 1.89 million, down 63K from two weeks ago. Supply is now 832K units higher than one year ago, or up 79% above last year.
  • Sold last 30 Days is 1.07 million, down 25K from two weeks ago. Sales pace now running 20% above last year.
  • The average Listing Price is $46,981, down $567 from two weeks ago. Prices are up 2% over last year – but the pace slowing slightly over recent weeks.

Used Car Outlook:

  • The Used Retail Active Listing Volume Index reverted to baseline at the start of 2023 meaning the market is not over-listed or under-listed as a relative average over the last 5 years.
  • The Used Retail Days-to-Turn estimate is currently around 51 days down from last week’s 54 days but still 20 days higher than this time last year.
  • Days of supply is 47, down one from two weeks ago. DS has been holding at this level through much of Q2 and into Q3. DS is now 9% below last year and sold in the last 30 Days is 1.42 million, up 31K from two weeks ago. Sales are now flat compared to this week last year.
  • The average Listing Price is $27,221, up $49 from two weeks ago. Prices are holding steady down slightly from last year, but following “normal” patterns and are down 3% from last year this week.

Wholesale Outlook: Source

  • The Car segment decreased by -0.59 with 0-to-2-year-olds and -.56% with 8-to-16-year-olds. 
  • The luxury segments had smaller depreciation last week down .3% less than last week.
  • The Truck segment decreased -0.50%, smaller than the prior week with the 0-to-2-year-old segments reporting a decline of -0.50% and the 8-to-16-year-olds down only -0.44%.

The 3-year-old index continued to depreciate this week, dropping 0.9% while lane efficiency increased for 3-year-old models and decreased for 6-year-old models. Sale prices were 2.01% below MMR which means for every 100 dollars in MMR value the market is paying 

Retail Margin Outlook

Looking at Black Book’s average of 2-6year old models, the

retail price drop shows some momentum, but looking at Mannheim 3-year-old model in the orange below right shows the drop for that age vehicle is in a much different state. The reason is that Black Book is blending inventory built pre-pandemic, 4-6-year-old models, and that skews the true picture. The true price elasticity outlook can be better told by looking at the 1-3-year-old indexed. Those are the years when the inventory is in the shortest supply, with the largest consumer demand and what dealers need the most.

Below that shows the difference in the spread and decline by luxury (high trim/high dollar) vs non-luxury. Luxury is declining faster in retail value but they are both declining equally in wholesale value. That screams that day-to-front line and day-to-turn are critical for your high-dollar inventory. The guidance is to stay on top of your used inventory investment portfolio and manage accordingly. Reach out to the team for help.


The market is slowing down in new car sales but that is having a positive impact on the retail price. With interest rate hikes this week and another in Q4, those price drops will be important to keep consumers’ payments as manageable as possible.

 With the wholesale market staying steady in its pattern of steep declines in cost but slow tapering in the retail price, margins are still available but only if you can get the vehicles in, reconditions, and turned before the market drops again. This is a week-to-week play and requires acquisition, reconditioning, and sales to all be on the same page.  Reach out to The Automotive Advisor Team for a consultation on how we are helping our clients turn fast and profit more.


Happy Selling,


John Ellis

CEO & Founder

The Automotive Advisor Team, Inc.