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Is it happening? Is the Used market cooling off?

Dan Sayer

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Dec 4, 2009
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One of our market GM's pointed out the most recent post from Jasen's LotPop FB Page regarding the hint of a downturn in shopper demand coming. Obviously, buying units now at the current prices may be the ones aging in June/July when shopper demand is low therefore providing a potential threat in retail/wholesale loss. I did dive into our Used leads for one of our largest markets to confirm. YTD YOY we are up 29.8% in Used Leads (all channels/types) but down 15.3% in the last 30 YOY and down 32.2% MTD YOY.

Used VDPs on our largest market site also tell a similar story. Used Unique Pageviews YTD YOY are up 22.5%. 30 days YOY are down 13.2%. Total Used Users are still up but trending down from a 40% YOY increase down to a 20% YOY increase in the last 30 days. Used inventory in this market has been fairly consistent, albiet low, this year.

Interested to know who else is seeing a similar trend? Is it seasonality?

Cars.com SRP per VIN have been in the 1,000 to 1,200 SRP's per VIN consistently and now we're below 700 SRPs per. Same trend in CarGurus.

Thoughts?
 
Less inventory = less to look at.
Do you want me to throw in a "Captain Obvious" image? I will. Don't temp me.

SRP per VIN is down and that market's total Used count is consistent so the trend downward in shoppers doesn't line up with any trend in inventory counts. In the other two main markets, who have had an increase, or flat inventory count, are seeing the same trends; fewer shoppers and decrease in SRP per unit. Cars.com got back to me that they are seeing a downward trend in shoppers as well from March to April and trending down from April to May. Asking if this is seasonal or if anyone else is seeing similar.
 
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Do you want me to throw in a "Captain Obvious" image? I will. Don't temp me.

Bring it :fight:

But you didn't mention how off your used car inventory is YOY in the past 30 days in your first post.

I think there are more dynamics at play though. Word of inflation is all over the news now. Economic confidence is beginning to dip.
 
Bring it :fight:

But you didn't mention how off your used car inventory is YOY in the past 30 days in your first post.

I think there are more dynamics at play though. Word of inflation is all over the news now. Economic confidence is beginning to dip.
Used inventory in this market has been fairly consistent, albiet low, this year.
With that said, vAuto and other tools like Homenet do a really bad job of tracking total units in a time period. vAuto really just gives you a daily inventory view (AutoTrader shows average daily inventory) on any day whereas inside of Cars.com reporting, you can find the total unique VINs that syndicated each month. Kinda like what I "comment-bombed" on Friday's show. If each dealer is looking at vAuto each day and comparing to a time last month, they're really looking at inventory counts through a skewed lens.
 
I can't say for your stores @Dan Sayer , but I am finding the spring of 2020 to be a bad benchmark because everything was so high then.

We had a really rough Feb/Mar/part of Apr of 2020, and then all hell broke loose about the 10th of April. We were full of inventory, our 3rd party leads were way up, and then came some of the best months we have had in 10 years. So, I find myself sort of dis-crediting comparisons to prior year May and soon to be prior year June-July-etc.

Now the trends that you are seeing are different because you aren't comparing to a time period that was outrageously high. You are comparing to yesterday or last week or last month.

I don't know that it is seasonality (annual trend) as much as it is possibly a return to reality. Student Loans are moving back into repayment, stimulus money is expiring, tax returns are about done, and it is time for families to start thinking about vacations and other things that aren't being funded by money that didn't come through payroll.

Do I believe that we are seeing a hint of downturn in shopper demand? Yes.

Is some of this because of us having less inventory? Yes.

Are we going to go load up on higher priced inventory to hopefully get another shot at what remains for shopper demand? No.

It is an interesting time in the car business, but I still love it!
 
Less inventory = less to look at.
We are seeing a very similar trend, but I think it's also important to point out the conversations that customers are having out in the wild. I think people having conversations about the price of used cars going haywire is reaching its peak and people are talking more and more about a lack of inventory. So not only are we reducing shoppers because of lack of interest in paying absurd prices, but with with people also saying, "Boy Kirksville Motor Company doesn't have any inventory..." people don't bother cruising the lot at midnight anymore. Less to look at and more people talking about less to look at.