Welcome to Topmarq Dealer Weekly for the latest industry news and reports. This time around, we see what’s happening with the priciest used cars, how car payments are setting records, and how to prepare for economic uncertainty.
Market At A Glance
- Used car prices remain flat
- Ultra-premium brands see increases
The used car market continues to be a snore-fest, according to CarGurus. The average transaction price hasn’t budged by more than a few dollars over the past few weeks. But, a deep dive into the numbers, reveals something interesting in the realm of specific super-premium brands. Used cars from Ferrari and other upper echelon automakers are seeing increases, while more normal vehicle prices are stagnating. The jumps are modest, a percentage point or two, but that can mean a $4,500 bump for a used Lambo with an average $238K transaction amount.
Monthly Car Payments Hit Record In May
The typical monthly car payment set a record last month, according to Cox Automotive data. It now takes 41.3 weeks of income to buy a new vehicle, this is an increase from 40.8 weeks in April. So, the average payment is now $712 per month, an all-time high, and a 2% increase from April’s figure of $698. Overall, this is 19% higher than what people were paying a year ago. The rise comes despite median income growing by 0.3%. The report attributes many factors for the higher amount:
- An increase of eight basis points to the average interest
- Higher vehicle prices
- Reduced manufacturer incentives
Where’s The Used Car Market Heading?
It’s a unique market for used car sellers. Prices remain high, but additional increases appear to be holding off, at least for the time being. Simultaneously, consumers are facing record inflation and economic pundits are using the “R” word (we’ll not tempt fate and avoid spelling it out). A brief but insightful story from CBT News brings attention to the potential turmoil that used car dealers may face in the coming months.
Projections are calling for an easing later this year of the microchip shortage. Assuming this happens, there will be less demand for pre-owned vehicles as consumers turn towards more readily available new models.
To prepare for a possible soft market, dealers are advised to take a two-prong approach as a precaution. To begin with, the article suggests lowering trade-in offers to avoid sitting on less-desirable inventory. Next, a thorough inventory analysis can spotlight the used cars with the fastest turnarounds and highest margins.
Give your dealership the upper hand with exclusive access to hundreds of consumer sellers in your area that you can't find on Craigslist or Facebook Marketplace.
- Improve profit per vehicle with inventory direct from local consumers.
- Focus on what matters with up to 5x higher lead-to-acquisition rate through our managed seller pipeline.
- Get access to more potential buyers
Try it for your dealership today and your first 5 cars are free - Request Access
NHTSA Releases Findings On Tesla and Waymo Crashes
The National Highway Traffic Safety Administration (NHTSA) earlier this week released crash data from vehicles with driver-assist technologies such as Tesla Autopilot. The report also looks at accidents involving Waymo’s self-driving cars and other fully autonomous vehicles.
Of the 367 crashes over the past nine months involving vehicles with driver-assist technologies (that control speed and steering), a Tesla was involved in 273 of these incidents. To be fair, Tesla has the lion’s share of this market, so it’s no surprise to see Elon’s creations at the center of things.
Likewise, a Waymo vehicle was tied to almost half (62, to be precise) of the reported accidents with a fully-autonomous conveyance. Shuttle operator Transdev cited 34 incidents and GM’s Cruise unit reported 23 accidents.