The Automotive Advisor weekly update by John Ellis is the ultimate pit stop for the latest updates and market trends in auto and beyond. Here’s the jisty jist of last week’s rundown:
📈 Job Market’s Looking Up —
The unemployment and underemployment rates have declined to pre-pandemic levels. The share of Americans reporting pay and income losses continued to trend lower in July.
👍 Consumer Confidence On The Rise —
Consumer sentiment hit 91.4%, the highest since December 2021. Jobs and wages are also rising, causing increased spending across most industries.
⛽️ Still, Gas Prices Fuel Concerns —
A key worry is the increase in gas prices that accelerated at the end of July. The annual average unleaded price increased 6.8% to $3.78 per gallon (down 10% YOY).
🩴 New and Used Flip Flops —
New car sales saw a slight dip of 0.5% WOW but used cars saw a 0.5% increase (totaling a 6% MOM increase). However, data shows that the YOY day supply of new vehicles grew by 17 days, while the used supply declined by six days.
⏬ Wholesale Declines a Little and a Lot —
Wholesale used-vehicle prices decreased by 1.6% in July from June. Pickups and vans lost less (down 6.6% and 9.9%, respectively), but SUVs fell 11.5%, and compact cars plummeted 15.9% YOY.
👴 Vintage Goods —
The average age of used inventory in the market is above 13 years old, which has major implications for reconditioning costs, service opportunities, and the ability to acquire inventory from a captive fixed OPS department.
💸 F&I Outlook —
The average auto loan interest rate in Q1 of 2023 was 6.58% for new cars and 11.70% for used cars. In response, the number of customers paying with straight-up stacks is growing, and long-term loan lengths are shrinking.
