For the initial months of 2022, a trend of minor declines in wholesale vehicle prices was observed. However, a shift occurred in June, when prices saw an upward spike following three consecutive months of slight drops.

Factors at Play: Inflation, Inventory, and Market Dynamics
Amidst rising inflation, escalating home interest rates, and sustained high home prices, the used car market witnessed fluctuations. New car inventory surged in early 2022, potentially causing a slowdown in used car sales. Conversely, the reduced availability of new cars in May and June led to dealers revisiting the used car market to replenish their inventory.

Inventory Dilemma: New Cars’ Scarcity
Recent data has revealed a significant scarcity of new cars across major manufacturers. Some giants in the industry, such as Mazda, Toyota, Honda, and Subaru, are reported to possess remarkably low supplies—some as low as 5 to 15 days’ worth of inventory. This scarcity has compelled dealerships to turn to used cars to sustain their operations.

Industry Perspective: Dealership Challenges
Dealerships are grappling with the challenge of managing severely limited new car stocks. The shortage has potentially prompted them to increase their reliance on used cars to sustain their inventory. Are you experiencing similar trends at your dealership? Share your insights—have you witnessed rising used car prices or experienced pressure on margins within your used car inventory?