PR & News Has the Used Car Market Bubble Popped??

[Jeff Kershner]

POP!!??
Some are saying YES and some are saying not quite yet and even then, it may be gradual.

What do you think?
How was your USED sales in January - did they continue on strong or are you witnessing a POP?

For us Used sales were hot and consistent until mid December. Mid-December hit and our Used shopping traffic took a significant dip as did sales. January continued with the decline.

Lucky Lopez is seeing and predicting a Used Car Market POP! - explains it in the video below. Checkout this perspective on what is going on with banks and auto loans. He also mentioned the REPO rate going WAY WAY UP. What would cause the REPO rate to explode?

Lucky is also predicting this "Tax season" NOT having the positive impact it usually does. The FED has already announced a rate hike for mid February with Big Banks cutting back on loans.




Lucky really focuses on the USED vehicle market and the Banks, and rightfully so. BUT it seems as if there's SO MUCH MORE going on, outside of the Automotive industry that's having an impact on the market.

*All these years in the industry and I never considered 60% of buyers are sub-prime - credit score 620 and lower. Too many years in the luxury side of the business.

 

[CarlAutofusion]

I think many consumers are waiting for used car prices to come down. For our clients, sales and leads has remained strong in January. However, towards the end of January, we're seeing signs in many (but not all) metros that consumers think prices are too high.

• VDP views are slightly higher but conversion rate dipped - meaning people are browsing but not pulling the trigger.
• Google Trends showed various breakout queries related to "used car prices dropping"
• Higher number of return visitors, especially from the 3rd party lead gen sites. (Means consumers are in the research/find process longer)

 

[ChrisR]

We had a record month in January. I see some prices being reduced, others are staying strong.

Will be curious to see how increased new production causes changes. However, there are still new car production challenges, which may help maintain some used acquisition, and cost values at close to these levels.

 

[Tallcool1]

I have not witnessed a change. If anything, I see things maybe a little stronger. Our volume is not great but our average grosses continue to be strong. Our volume issues are self inflicted. I am not comfortable loading up, and that is the biggest factor in our volume being down.

 

[BillKVMotorCo]

We struggled a bit in January for the first time in quite a bit. Gross was still strong, so it may have affected our volume a bit. We averaged 98 used cars last year, but only had 77 in January in spite of the fact that our used inventory was the highest it had been in a while. That was the lowest since May of 2021.

There are a few things that lead me to believe that the market may be turning besides this though. One, we are starting to see new inventory come in quicker. Additionally, I believe rising interest rates will do the work that is intended and reduce purchases. On top of that, our inventory mix has not been changing dramatically, but I track the market day supply of our inventory in vAuto daily and the number increased almost daily from 59 at the start of last month to 93 today. I think that number reflects the market around us more than it does our inventory.

All that being said, we are off to a pretty good start again this month, so who knows. We had a couple of times last year where things started looking like they were going to turn and we came out of it quickly. For instance, in May of 21 we did 79, but turned around and sold 95 in June.

 

[Ryan Everson]

I wouldn't expect a pop, there's pent-up demand still and no immediate relief of supply anytime soon. There are only 200k additional new cars expected this year. I predict it will be more of a gradual softening.

6) Used Car Prices Will Reach All-Time High in Tax Season and Remain Elevated Through Q4
Expect another tax season on steroids with demand high, new car supply low, and inflation continuing. With less than 200K additional new cars predicted to be sold in 2022 over 2021, used car prices will remain elevated through Q4.

22 Retail Automotive Predictions for 2022

Happy New Year everyone! I threw together this quick list of some 2022 predictions for retail automotive dealers. What are your thoughts and what else did I miss? 1) More Lenders Will Enter the Digital Retailing Space Expect other lenders to jump on the bandwagon after Capital One managed to...

forum.dealerrefresh.com

 

[Retail My Ride]

Prices leveling off some and weekly "increases are decreasing." Demand and sales continued solid in January, especially compared to pre-covid Januarys. Consignment continues to grow as a great vehicle sourcing option! Avoid insane auction prices. Learn more about how to add consignment option to sourcing strategy.

 

[flosho]

NIce post!

bruh... that's what you bring a 2 year old post back with...