Weekly Economic Update

John Ellis and his weekly economic update never let us down, so we'd let you down by not dropping a recap here!

💸 Economy:

• Consumer sentiment has reached its highest level since December 2021 at 91.4%.
• Job numbers, wages, and spending are up, while inflation is softening to 2.4% and is expected to reach 2% in August.

🚘 New & Used Car:

• New car sales dipped by 0.5% week over week, but supply is growing.
• Used car sales increased by 0.5% week over week, and supply is down.

🧾 Wholesale:

• Depreciation is slowing, down 0.6% for the 3-year-old index.
• Non-luxury and luxury depreciated by 0.7%.
• Sale prices remain below MMR but are improving, and lane efficiency increased for both 3-year-olds and 6-year-olds.

🛍️ Retail Spread:

• Wholesale value declined for all model-year vehicles, with older models declining less.
• Spread percentages are relatively stable for various vehicle ages.

🏦 F&I Outlook:

• A shift towards cash pay is growing, and long-term lengths are shrinking.
• Banks and captives are still trending above credit unions, but the situation is improving.
• Dealers should be transparent about financing as part of the deal to create profitability.

📢 Summary:

• Positive consumer sentiment and stabilization in the market indicate a manageable acquisition, retail, and disposal market.
• Focus on fundamental efficiencies to continue profitability.
• The update emphasizes the necessity of reconditioning strategies and careful management of inventory acquisition costs.