The Automotive Advisor Team

Summer Selling Season…Hot or Not??


Economic Source

Despite remaining above the Federal Reserve’s 2% target, as reported last week, inflation showed signs of potential slowing, being slightly lower than expected.  The market reacted positively to these numbers as they suggest the Federal Reserve is making progress in controlling inflation. The Feds reiterated that its bias is to maintain interest rates at current levels until inflation shows a clearer downward trend.

Although moving in a better direction, consumers are still pinched with access to auto credit decreasing overall in May, presenting challenges for subprime borrowers. The good news is although loan delinquencies rose in May, a decline in defaults offered some positive news for the auto lending sector.

Falling energy prices in May, especially gasoline, played a role in holding inflation steady and consumers have an increasingly favorable outlook ahead that will only help our automotive market.

Cox Automotive’s Manheim Wholesales Market Source

Three-year-old wholesale values depreciated 0.4% this week while lane efficiency continued to increase. Used retail sales trended close to 2019 levels and days’ supply is at 42 days. New retail sales still running slightly below 2019 levels. New days’ supply at 75 days.


  • The 3-year-old index depreciated 0.4% to 97.0%. Non-luxury depreciated 0.3% and luxury depreciated 0.6%.
    • Wholesale values dropped for all model years.
    • For the second week in a row, sale prices moved closer to MMR but sale prices are still below MMR (-1.28%).
  • Lane efficiency increased for both 3 and 6-year-old models and is running ahead of the last two years.


Black Book: Source

  • The market continued to decline last week, but the rate of depreciation slowed, registering a drop of -0.55% compared to the previous week’s -0.71%.
  • Despite the reduced depreciation, the current rate of decline exceeds pre-pandemic norms for this time of year of -0.27%.
  • On a volume-weighted basis, the overall Car segment decreased -0.58%. For reference, in the previous week, cars decreased -0.34%.
  • Average auction sales rate this week was 56%, up 1% from the previous week.
  • The Used Retail Days-to-Turn estimate is now sitting around 42 days.

Retail Trending: Source

  • Retail prices declined 0.2% for non-luxury and 0.4% for luxury. Spreads improving due to steeper declines in wholesale values.
  • The used retail sales rate trended similar to 2019; days’ supply moved down to 42 days.
  • New car sales trending slightly below 2019 levels and days’ supply at 75 days.
  • Used cars below $15,000 continue to show constrained availability with only 34 days’ supply, 22% less than the average. Affordability remains challenging for consumers, and supply is more limited at lower price points. The top five sellers of the month sold at an average price of $23,999, about 7% below the average listing price for all vehicles sold, and were once again Ford, Chevrolet, Toyota, Honda and Nissan, accounting for 52% of all used vehicles sold.

Summary: Source

For new car buyers, the time is ripe to leverage high inventory levels and low APR financing deals. On the flip side, used car shoppers will need to navigate a more complex market with caution. Interest rates remain very high, and that’s keeping many would-be buyers away from used car lots.

Used car prices are down about 5% in 2024 but remain high. The average used car listing price is $25,540, which is still $4,000 higher than just five years ago.

Used car inventory remains tighter than the new car market and there are signs of softening in the used market. With prices steady, margins are present for dealers that have an inventory strategy that is agile to market price-band and segment demand.