- Topmarq Dealer Weekly
- Posts
- Volume 01, Edition 14
Good Afternoon,
Welcome to the newest Topmarq Dealer Weekly, your resource for industry reports and information.
In this edition, we review the dreary sales data for May. But at least there’s some cheery news when it comes to certain car colors and depreciation.
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Cheers!
Market at a Glance
No change in averages for used retail sales
Wholesale used vehicle values increase
Supplies decline from April
Used car retail transactions remained stable over the past week, according to CarGurus. So, we’ll skip the “no news is good news” details to look at the wholesale side of things. Cox Automotive’s Manheim Used Vehicle Value Index shows a 0.7% increase for May. This follows a 1% drop from March to April. Overall, that’s a 9.7% increase from a year ago. We’ll have to wait and see how the May jump affects retail pricing over the next month or two.
The estimated days of used car supplies (in the retail network) for May dipped to 44 days, compared to 49 days from April. It’s still far better than how things looked last year when May 2021 ended with just 37 days of used car supplies. On the wholesale end, May 2022 ended with 24 days of goods, a slight dip from April’s 25 days.
Cox Automotive
Fleet Sales Drop Significantly in May
Cox Automotive also notes the sale of new vehicles to commercial, government, and large rental fleets dropped by 8.7% month-over-month in May (141,047 units). Year-over-year, the figures represents a 16.1% decline from May 2021. That includes a 5.9% increase for government sales but a 33% fall-off for rental fleets. Commercial purchases remained flat (down 0.1% for the year).
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New Light-Vehicle Sales Down 12.6%
Meanwhile, NADA reports that May 2022 new light-vehicle sales fell 12.6%. That’s a seasonally adjusted annual rate (SAAR) of 12.7 million units and a decline of 24.9% from May 2021. It’s under the mid-13 million SAAR the dealer group had predicted. NADA advises this pace won’t help Q2 estimates, nor are things likely to get better (for Q2) to top the 14.1 million unit average SAAR for Q1. The organization expects June sales to beat last month’s results.
Attributing the May numbers to a lack of inventory (no surprise), NADA also points a finger at record low average automaker incentives for May of just $965. That’s a decline from an average of $1,044 in April.
Color Affects Vehicle Depreciation
Let’s take a break from gloomy May numbers (remember, we’re just the messenger). Instead, we’ll look at what iSeeCars.com had to say about vehicle color and depreciation. The site analyzed 650,000 recently sold three-year-old cars and tracked depreciation by color. Grab the sunglasses because the results are, shall we say, bright.
Leading the pack is yellow, with an average three-year depreciation of 4.5%. Behind it is orange and a 10.7% decline in value over the same period. Completing the podium positions is purple, with 13.9% average depreciation.
Do these colors bring any cars to mind? You’d be right if your thoughts include the Jeep Wrangler, which iSeeCars reports as the bestseller in the yellow category. The site also gives the nod to the Subaru Crosstrek and special editions of the Mazda Miata and Toyota GR86 for satisfying fans of orange.
But don’t worry if you have a lot full of black, white, gray, and silver cars. These colors don’t appear to have a significant impact on depreciation.