- Topmarq Dealer Weekly
- Posts
- Volume 01, Edition 11
Good morning,
Welcome to Topmarq Dealer Weekly, your snapshot of industry news and happenings. Here's the latest on used car sales, why the average new car payment now borders $700, and how one dealer is embracing EVs and hybrids. And Carvana takes another hit.
Our apologies for the delayed episode this week, we'll be back on track from now on. Looking for other stories? Let us know what you'd like to read about.
Cheers!
Market at a Glance
Used retail car prices drop (a little)
Trend matches wholesale numbers
For the first time since we launched Dealer Weekly (two months ago), data from cargurus.com show a drop in the average retail price of a used vehicle. That's currently $30,799 versus $30,828 a week ago. Yes, the $29 dip isn't much to write home about, but it's perhaps a bellwether of things to come.
These numbers coincide with the 1% fall in wholesale prices we wrote about in the last issue. Check out the Manheim Used Vehicle Value index for more details.
New Car Affordability Drops
But what the used car market gives, the new car segment takes away. We're talking about affordability for what automakers are producing. And Cox Automotive reports that despite April’s 0.3% increase in median income, consumers needed 40.6 weeks of income to pay for the average new car. This is up from 40.2 weeks in March.
The transaction price increased by 0.7%, and the interest rate on financing jumped by 20 basis points. It adds up to a 1.4% increase in the typical monthly payment to $698, a record high.
And here's the most sobering statistic; the median household income required to pay for a new car is up by 18% from the previous year. Add in that gasoline just topped $4 per gallon in every state for the first time, and consumers feel the squeeze from multiple directions.
Cox Automotive
An Outlet for Used EVs/Hybrids Boosts Sales
Trying times often lead to the best thinking. Such is the case with one dealership group that hopped on the electrification trend by opening a store for just pre-owned EVs and hybrids. Automotive News tells the story of how Colorado-based Phil Long Dealerships converted an empty site into an outlet just for EVs and hybrids.
Opened a year ago, the Phil Long EV Outlet went from a dozen or so deals per month in the early days to moving 18 to 22 cars now. The story provides an insightful quote from a company executive, "All that new product pipeline coming down the road really brought home to us that we're living in a time right now where it's the least amount of electric vehicles on the road right now for the rest of our lifetimes."
Carvana Loses Illinois Dealer License
We're not ones to pour salt on a wound, but things for Carvana go from bad to worse. The Illinois Secretary of State suspended the company's license to do business in the sixth most-populated state. Illinois is responding to more than 90 customer complaints centering on failure to properly handle title work for purchased vehicles. Accusations also cite misuse of out-of-state temporary registrations.
In a statement, Carvana vigorously denied the allegations and said it's working with Illinois authorities to resolve matters. This isn't the first time the online dealer has run afoul of state officials. Carvana barely escaped a similar fate earlier this year in Florida. And its dealer license in North Carolina was restored in January following a six-month suspension.
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