The Manheim Used Vehicles Value Index is slowing down after three months of growth. The index is 2.7% lower than a month ago and down 4% year-over-year. Cox Auto says predictable seasonal adjustments account for some of the drops, but with wholesale prices going up as of April 15, the spring market is ending.
Prices are dipping a little quicker than the flowers are blooming.
The Federal Reserve's Beige Book shows the economy is similarly putting along, with some minor declines. With some downturns, consumer spending is mostly flat, but prices show moderate growth. Travel and tourism increased significantly, while manufacturing and transportation dipped with consumer and business loan volume.
The broader economy is not giving people the incentive (or confidence) to trade in their ride. Repair it? Yes. Replace it? No.
Dale Pollak spoke about a used car business "profit coma" in his recent "How I See It" blog post. At moments of market change, especially predictable changes like the end of the spring market, dealers need to evaluate their strategy to ensure they have the right cars, prices, and marketing. Failure to do so will burn up those pesky profits we keep hearing about.
"Fishing with yarn is easier than digging for worms, but fish don't knit." -A wise old man saying we just made up.