Auto incentives are back — but high interest rates weaken deals for buyers

KEY POINTS

  • Incentives are coming back to the auto market, but interest rates remain high.
  • However, car shoppers can still reap the benefits. It will require more research and flexibility.
  • “Consumers can find good deals, but you have to go model by model,” said Brian Moody, executive editor at Kelley Blue Book.

Incentives are coming back to the auto market, but high interest rates are weakening those deals for car shoppers.

“Pre-pandemic, people would see a 0% financing for 60 months and think, ‘no big deal,’ because it was available everywhere,” said Jessica Caldwell, an insights analyst at Edmunds, an auto research site.

In today’s market, consumers are more likely to see it as “free money,” she said, especially as auto loan rates stay high.

The average annual percentage rate for a new car loan was 7.1% in the first quarter of 2024, marking the fifth month in a row of rates more than 7%, according to Edmunds.

The APR for used car loans rose 11.7% in the same period, up one-tenth of a percentage point from the prior quarter.

Despite high borrowing costs, car shoppers can still reap some benefits from reintroduced financing offers and other incentives like discounts and dealer cash. But shoppers must to do more research than in that earlier era to find those deals, experts say. 

“Consumers can find good deals, but you have to go model by model,” said Brian Moody, executive editor at Kelley Blue Book.

Be cautious about longer loan terms

Financing offers depend in part on the loan term. You might get a better interest rate with a short term, but a lower monthly payment with a long term.

While extending the life of the loan can help shrink monthly costs, you risk owing more than what the car is worth, which can create more financial problems later on, experts say.

“The negative equity situation is real,” Edmunds’ Caldwell said.

Shoppers must be realistic about how long they plan to keep the car, Caldwell explained.

If you’re someone who buys a new car every three to four years, you might end up in a situation when you trade in that your vehicle and is worth less than you owe, she said.

The share of new car purchases in that situation — known as a negative-equity trade-in — rose to 23.1% in the first quarter, according to Edmunds. That’s up from 18.3% from a year ago and 14.7% in the first quarter of 2022.

The average amount of negative equity jumped to an all-time high of $6,167 in the first quarter, researchers found.

When you roll that into your new car loan, it increases your payment.

The average monthly payment for new car shoppers who traded in underwater loans was $887 in the first quarter, according to Edmunds. The average APR was 8.1% for a term length of 75.8 months.

When you’re comparing financing options, instead of only focusing on lowering the monthly payment, be sure to figure out the total interest you will be paying, experts say.

“That’s where you have to be cognizant,” Caldwell said. “Longer loan terms will always look more attractive because they’re more affordable, but that’s really only part of the story.”

According to Moody: “The quicker you pay it off, the less interest you’re paying.”

What to do before you go to the auto dealer

1. Search for available incentives: Car shoppers will have to a do lot more shopping and research to find available incentives, Caldwell said.

“There are deals creeping out there,” she said. “There was a point two years ago where there just wasn’t any; no deals to be had.”

Seek out models that are not in high demand, as automakers and dealers “rarely incentivize popular” models, Moody said.

“There might be cash back or low financing on one type of Ford, but on [another] type, there’s nothing,” Moody said. “It makes it more challenging for consumers because you really have to go and do your research.” 

2. Know your credit score: While shoppers might come across 0% financing offers, those deals are often reserved for buyers with excellent credit. Find out what your latest score is to avoid getting stuck into deals you didn’t fully understand, Moody explained.

3. Get pre-qualified for different loans: Shop around for auto loans at different banks or credit unions before going to the dealer, experts say.

That lets you determine what kind of interest rate you’re able to get and compare offers, Moody said.

Don’t limit yourself to comparing the monthly payments. Consider the amount of interest you will be paying over the life of the loan, Caldwell said.

Having these options will also help you negotiate with dealers.

“Always give the dealer the opportunity to beat that deal in terms of interest rate and the loans terms, and oftentimes, they can,” Moody said. “If they can’t, you already have this loan.”

Originally published by CNBC https://www.cnbc.com/2024/05/16/despite-auto-incentives-high-interest-rates-weaken-deals-for-buyers.html?__source=iosappshare%7Ccom.microsoft.Office.Outlook.compose-shareextension

Wholesale Used-Vehicle Prices Declined in April

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were down in April compared to March. The Manheim Used Vehicle Value Index (MUVVI) fell to 198.4, a decline of 14.0% from a year ago. The seasonal adjustment to the index magnified the results for the month, resulting in a 2.3% month-over-month decrease. The non-adjusted price in April decreased by 0.6% compared to March, moving the unadjusted average price down 11.9% year over year.

Go to coxautoinc.com (April-2024-Manheim-Used-Vehicle-Value-Index-image subpage)

In April, Manheim Market Report (MMR) values saw weekly decreases that were slightly above long-term averages during each week of the month. Over the last four weeks, the Three-Year-Old Index decreased an aggregate of 1.6%, including a decline of 0.5% in the last week of the month. Those same five weeks delivered an average decrease of 1.0% between 2014 and 2019, illustrating that depreciation trends are currently tracking higher than long-term averages for the year.

Over the month of April, daily MMR Retention, which is the average difference in price relative to the current MMR, averaged 98.3%, meaning market prices fell below MMR values and declined against March as well, which was 99.4%. The average daily sales conversion rate dropped to 59.6%, showing that demand declined relative to March, which is seasonally normal for this time of year. For comparison, the daily sales conversion rate averaged 60.4% in April during the last three years.

The major market segments all experienced seasonally adjusted prices that were down year over year in April. Compared to April 2023, luxury was the only segment that lost less than the industry, down just 12.9%, and SUVs were down a little more than the market, falling by 14.6% year over year. The worst-performing segment was compact cars, down 17.6% against last year, followed by midsize cars, off by 16.8%, with pickups down 15.2%. Compared to last month, the pickup segment fell by just 1.3%, less than the market’s decline of 2.3% for the month. Compact cars fell the most against March, declining by 3.9%, luxury was down 3.2%, SUVs decreased by 3.1%, and midsize cars were down 3.0%.

Go to coxautoinc.com (April-2024-MUVVI-sales-distribution-by-market-class subpage)

With the increase in interest in electric vehicle (EV) values versus the non-EV market, we are working on sharing metrics for those segments. Seasonally adjusted EV values for April 2024 were down 17.5%, while non-EVs were down 13.1% year over year. Regarding values against last month, seasonally adjusted EV values declined in line with the market, falling by 2.6% from March 2024, while non-EVs declined 3.0% over the same period.

Retail Used-Vehicle Sales Decreased in April

Assessing retail vehicle sales based on observed changes in units tracked by vAuto, we initially estimate that retail used-vehicle sales in April were down 4% compared to March but higher year over year by 9%. The average retail listing price for a used vehicle was up 2% over the last four weeks.   

Using estimates of retail used days’ supply based on vAuto data, an initial assessment indicates April ended at 45 days’ supply, up two days from 43 days at the end of March but down one day from April 2023 at 46 days.

April’s total new-light-vehicle sales were down 3.3% from last year, and volume was down 9.1% from March. The April sales pace, or seasonally adjusted annual rate (SAAR), came in at 15.7 million, up just 0.4% from last year and up slightly from March’s 15.6 million level. 

Combined sales into large rental, commercial, and government fleets declined 5.6% year over year in April. Including an estimate for fleet deliveries into dealer and manufacturer channels, the remaining retail sales were estimated to be down 1.2% from last year, leading to an estimated retail SAAR of 12.9 million, up 0.2 million from last year’s pace, and up from March’s 12.8 million level. Fleet market share was estimated to be 17.5%, down from last year’s 19.3% share. 

Rental Risk Prices Mixed; Mileage Declines Slowed in April

The average price for rental risk units sold at auction in April declined 12.2% year over year. Rental risk prices increased by just 0.2% compared to March. Average mileage for rental risk units in April (at 58,800 miles) continues to be down compared to a year ago but much less than recent periods, declining by only 1.3% against April 2023. Mileage for units in April was up 12.1% from March.

All Measures of Consumer Confidence Saw Declines in April

The Conference Board Consumer Confidence Index® declined 5.9% in April, as views of both the present situation and the future declined. As a result of the decline, consumer confidence was down 6.5% year over year. Plans to purchase a vehicle in the next six months declined but remained higher year over year. According to the sentiment index from the University of Michigan, consumer sentiment declined 2.8% in April but was up 21.2% year over year. The median consumer expectation for inflation in a year jumped to 3.2%, its highest level since November, and the expectation for five years increased to 3.0%, which was also the highest since November. The consumer’s view of buying conditions for vehicles declined to the lowest level since December as views of both interest rates and prices deteriorated. The daily index of consumer sentiment from Morning Consult was very volatile in April and ended up declining by 1.6% for the month, leaving the index up by 7.3% year over year. Gas prices increased in April. The national average price for unleaded gas from AAA increased 3.6% from the end of March to $3.66 per gallon, which was up 2% year over year.

Link to the full article https://www.coxautoinc.com/market-insights/april-2024-muvvi/

The Advanced News

June 2024
A Message From The ADS Team
We hope you all had a fantastic Memorial Day Weekend and found time to enjoy the sun, lake, pool, or BBQ with friends and family. Equally, we sincerely hope the tragic storms that wreaked havoc across the country over the last couple weeks steered clear of you, your families and your dealerships.
 
This is always an exciting time of year for the ADS team. As the country celebrates the unofficial start to summer, we celebrate the official start to prime selling season for the dealers we are fortunate to work with and support. By all accounts, sales, as a whole, continue to meet or exceed expectations. Although many prognosticators predicted the downfall in F&I performance during the post COVID era, we at ADS, are honored to say our stores are holding pace, and even setting new records in PVR and PPRU. There are many contributing factors to this, but the basis is our incredibly talented team, our unique F&I sales process, and the support and accountability we provide our stores. If you are interested in learning how to improve your F&I process, profitability, reinsurance performance, etc. please contact us to see if we are the fit you are looking for.

Sincerely,
 
Bob and Ryan

IN THE NEWS 

Wholesale Used Vehicle Prices Decline in April
PERSONAL FINANCE
Auto incentives are back — but high interest rates weaken deals for buyers
US Economic Outlook May 2024 
Why Dealer’s Switch from DOWC’s to ARC’s
What Does Gen Z Want in F&I Products?
 
EVENTS WE WILL BE ATTENDING 

NAMAD – https://web.cvent.com/event/edcd733e-ea51-4261-842b-30b68f704934/summary
RVDA – https://www.rvda.org/Convention
F&I Product and Reinsurance Conference – https://www.fandi-conference.com/

 
Good Luck and Good Selling!

View our full newsletter https://mailchi.mp/advdealer.com/june-newsletter-6oe2lwzsev

Fed leaves rates unchanged, flags ‘lack of further progress’ on inflation

WASHINGTON, May 1 (Reuters) – The U.S. Federal Reserve held interest rates steady on Wednesday and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming.

Indeed, Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it “will take longer than previously expected” for policymakers to become comfortable that inflation will resume the decline towards 2% that had cheered them through much of last year.

That steady progress has stalled for now, and while Powell said rate increases remained unlikely, he set the stage for a potentially extended hold of the benchmark policy rate in the 5.25%-5.50% range that has been in place since July.

U.S. central bankers still believe the current policy rate is putting enough pressure on economic activity to bring inflation under control, Powell said, and they would be content to wait as long as needed for that to become apparent – even if inflation is simply “moving sideways” in the meantime.

The Fed’s preferred inflation measure – the personal consumption expenditures price index – increased at a 2.7% annual rate in March, an acceleration from the prior month.

“Inflation is still too high,” Powell said in a press conference after the end of the Federal Open Market Committee’s two-day policy meeting. “Further progress in bringing it down is not assured and the path forward is uncertain.”

Powell said his forecast remained for inflation to fall over the course of the year, but that “my confidence in that is lower than it was.”

Whether there are rate cuts this year or not remains in doubt.

“If we did have a path where inflation proves more persistent than expected, and where the labor market remains strong but inflation is moving sideways and we’re not gaining greater confidence, well, that would be a case in which it could be appropriate to hold off on rate cuts,” Powell said. “There are paths to not cutting and there are paths to cutting. It’s really going to depend on the data.”

Despite the uncertainty of the current economic moment, Powell’s characterization of rate hikes as “unlikely” cheered investors concerned about a newly hawkish Fed chief.

U.S. stock and bond prices turned higher as Powell preached patience that may delay rate cuts, but also means a high bar for any more hikes. The Fed raised its benchmark policy rate by 5.25 percentage points in 2022 and 2023 to curb a surge in inflation.

Powell’s remarks on Wednesday were “notably less hawkish than many feared,” said analysts at Evercore ISI. “The basic message was that cuts have been delayed, not derailed.”

Investors in contracts tied to the Fed’s policy rate increased bets that rate cuts could begin in September rather than later in the year as reflected in earlier market pricing.

BALANCE SHEET

The Fed’s latest policy statement kept key elements of its economic assessment and policy guidance intact, noting that “inflation has eased” over the past year, and framing its discussion of interest rates around the conditions under which borrowing costs can be lowered.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%,” the Fed repeated in its unanimously-approved statement.

That continues to leave the timing of any rate cut in doubt, and Fed officials made emphatic their concern that the first months of 2024 have done little to help the cause.

“In recent months, there has been a lack of further progress towards the Committee’s 2% inflation objective,” the Fed said in its statement.

Reuters Graphics
Reuters Graphics

The U.S. central bank also announced it will scale back the pace at which it is shrinking its balance sheet starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60 billion. Mortgage-backed securities will continue to run off by up to $35 billion monthly.

The step is meant to ensure the financial system does not run short of reserves, as happened in 2019 during the Fed’s last round of “quantitative tightening.”

While the move could loosen financial conditions at the margin at a time when the U.S. central bank is trying to keep pressure on the economy, policymakers insist their balance sheet and interest rate tools serve different ends.

The Fed maintained its overall assessment of economic growth, saying that the economy “continued to expand at a solid pace. Job gains have remained strong and the unemployment rate has remained low.”

Powell reconciled that with the relatively weak, 1.6% growth of gross domestic product in the first quarter by saying that the 3.1% increase in private domestic demand was a better gauge of where the economy stands, with output buttressed by a recent jump in immigration.

Asked about the risk the U.S. was entering a period of “stagflation” with stagnant growth and rising prices, Powell said current conditions are nothing like those seen in the late 1970s when prices were rising more than 10% annually at one point alongside high unemployment.

“Right now we have … pretty solid growth … We have inflation running under 3%,” Powell said. “I don’t see the ‘stag’ and I don’t see the ‘flation.'”

Originally posted by Reuters https://www.reuters.com/markets/rates-bonds/fed-hold-rates-steady-inflation-dims-hopes-policy-easing-2024-05-01/

EV Sales Growth Slows; Market Leader Tesla Stalls

Electric vehicle (EV) sales growth in the U.S. continues to slow, according to sales data analyzed by Kelley Blue Book. In the first quarter of 2024, Americans bought 268,909 new electric vehicles, according to Kelley Blue Book counts. EV share of total new-vehicle sales in Q1 was 7.3%, a decrease from Q4 2023.

While annual EV sales continue to grow in the U.S. market, the growth rate has slowed notably. Sales in Q1 rose 2.6% year over year, but fell 15.2% compared to Q4 2023. The increase last quarter was well below the previous two years.

In Q1 2023, EV sales volumes were up 46.4% year over year and 15.5% quarter over quarter. In Q1 2022, EV sales were higher by 81.2% year over year and 20.4% higher than the previous quarter.

“Electric vehicle sales in the U.S. declined during Q1 2024 – the first quarter-over-quarter downturn since Q2 2020,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.

“As anticipated, Tesla’s sales took a hit, influencing the overall market dynamics. However, a few brands saw significant EV sales increases, achieving over 50% year-over-year growth. As noted in January, we are calling 2024, ‘the Year of More’. More new products, more incentives, more inventory, more leasing and more infrastructure will drive EV sales higher this year. Even so, we’ll continue to see ups and downs as the industry moves towards electrification.”

Analysts at Cox Automotive had expected a slowdown in EV sales growth. Segment growth typically slows as volume increases. This is certainly true with the market leader Tesla, which reported notably lower global deliveries in Q1 2024.

According to Kelley Blue Book estimates, Tesla sales in the U.S. were down 13.3% year over year – well below the typical double-digit growth that had become routine with the Tesla brand. Tesla’s share of the electric vehicle market in Q1 2024 was 51.3%, down from 61.7% one year earlier.

Though the overall year-over-year growth was minimal in Q1, nine manufacturers recorded more than 50% year-over-year growth in EV sales – BMW, Cadillac, Ford, Hyundai, Kia, Lexus, Mercedes, Rivian and Vinfast.

Q1 2024 EV SHARE OF TOTAL BRAND SALES
Go to coxautoinc.com (Q1-2024-EV-share-to-brand-sales-revised-chart subpage)

Notably, lower prices have supported EV sales volume in the U.S., particularly for key Tesla models. The average transaction price for a new EV in Q1 was $55,167, a 9.0% decrease compared to Q1 2023 and down 3.8% quarter over quarter. Tesla’s average transaction price was $52,315 in Q1, down roughly 13.5% year over year. However, lower prices did not generate higher volume.

Many automakers have followed Tesla’s lead and slashed prices. Incentive spending on EVs has increased notably in the past year, another sign of slowing demand. Leasing, too, has increased. In Q1, roughly 27% of all EVs were leased, more than double from the year before. With leasing, many buyers can qualify for the full $7,500 incentive the Inflation Reduction Act offers.

One bright spot in Q1: Strong EV sales from luxury makers, suggesting the EV market continues to be luxury-driven. Cadillac achieved a 499.2% year-over-year increase in electric vehicle sales due to robust sales of its Lyriq model. At Mercedes, EV sales were up 66.9%. BMW posted a 62.6% increase in EV sales compared to Q1 2023. At Audi, Q1 EV sales grew 28.8% year over year.

Meanwhile, sales of the most affordable EV in the U.S. – the Chevy Bolt – have been temporarily halted. Bolt sales fell 64.3% year over year in Q1, hitting just 7,040, as production stopped. A new version of the Bolt is expected to launch in 2025. On the non-luxury side, Ford achieved an 86.1% year-over-year increase in Q1 EV sales with the second-highest EV sales volume behind Tesla.

Cox Automotive forecasts EV sales in the U.S. to increase year over year in 2024, making this year the best year ever for EV sales. Analysts expect EV sales to reach roughly 10% of the market by the end of the year, up from 7.3% in the first quarter.

Originally posted by Cox Automotive- https://www.coxautoinc.com/market-insights/q1-2024-ev-sales/#:~:text=Electric%20vehicle%20(EV)%20sales%20growth,a%20decrease%20from%20Q4%202023

Stellantis sales drop 10% in first quarter

Stellantis NV sales dropped 10% in the first quarter compared to last year, with its Ram and Dodge brands suffering the steepest sales declines.

The transatlantic automaker, which also offers Chrysler, Jeep, Fiat and Alfa Romeo in the United States, sold 332,540 vehicles in the first three months of the year compared to 368,327 a year ago. Bright spots were Jeep, which saw a 2% uptick due to several popular vehicles including its plug-in hybrids, as well as a 9% rise for Chrysler sales thanks to its Pacifica minivan.

“As Jeep prepares to deliver its first fully electric vehicle, the Jeep Wagoneer S, in the U.S. in the second quarter, the brand saw significant growth across its portfolio in Q1, and the Jeep Wrangler 4xe and the Jeep Grand Cherokee 4xe are currently ranked the No. 1 and No. 2 best-selling hybrids in the country,” Jason Stoicevich, Stellantis head of U.S. sales, said in a statement. “2024 will be a transformative year for the company and our consumers, and our focus and commitment remain on delivering best-in-class products across Stellantis’ diverse portfolio.”

The sales drop-off was in contrast to most other automakers, which reported strong year-over-year sales increases this week. However, General Motors Co., Kia Corp. and Tesla Inc. had declines. GM reported a sales drop of 1.5% year-over-year to 594,233 in the first quarter.

In the first quarter of 2023, Stellantis also witnessed a 9% decline in sales. For all of 2023, however, it saw just a 1% sales decline in the United States compared to 2022.

Stellantis highlighted the healthy sales of its plug-in hybrids for the quarter, which increased 82%. The automaker noted that its Jeep Wrangler 4xe, Jeep Grand Cherokee 4xe, Dodge Hornet R/T and Chrysler Pacifica Hybrid took four of the five top spots for best-selling hybrids in the country as of last year. The company is getting set to launch eight fully battery-powered vehicles in the United States by the end of 2024.

Jeep’s sales were positive thanks to healthy sales of its Compass, Renegade, Wagoneer and Grand Wagoneer. Sales of the popular Grand Cherokee and Wrangler models were about flat.

Ram saw steep sales declines, including of its ProMaster vans, but noted the 2025 Ram 1500 is arriving at dealerships now. Dodge saw sales declines of its Charger and Challenger — which ended production last year — and Durango SUV, though it is releasing an all-new electrified Charger in the coming months.

Originally published by The Detroit News https://www.detroitnews.com/story/business/autos/chrysler/2024/04/03/stellantis-sales-drop-10-in-first-quarter/73179553007/

RVIA’s March 2024 Report Reveals 9% RV Shipment Increase Through First Quarter

The RV Industry Association‘s (RVIA) March 2024 survey of manufacturers revealed that total RV shipments concluded the month with 32,243 units, marking a 1.2% increase compared to the 31,869 units shipped in March 2023.

Additionally, RV shipments have increased 9.3% compared to the same timeframe last year, totaling 85,941 units through March.

RVIA President & CEO Craig Kirby highlighted the growth of RV shipment. “Our cautious optimism for the year continues as RV shipments are up over 9% through the first quarter of 2024. The strong desire to get out and RV continues with our latest survey data showing that 89% of RVers have taken an RV trip in the past year and 26 million Americans planning to take an RV trip this spring. Millennials, many with young families, are showing the greatest interest in RVing with 38% of Millennials saying they would like to take an RV trip in the next year,” Kirby said in a News & Insights report of RVIA.

In detailed shipment categories, towable RVs, predominantly conventional travel trailers, saw a 5.9% increase from last March, totaling 29,018 shipments. Conversely, motorhomes experienced a decline, dropping 27.8% to 3,225 units.

Park Model RVs also saw a decrease, with shipments falling 36.5% to 343 units in March compared to the same month the previous year.

In a February 2024 report, the RVIA reported a 17.8% increase in RV shipments compared to the previous year, with 31,024 units shipped. This rise was particularly in the towable RV category, including conventional travel trailers, which experienced a 24.4% surge in shipments to 26,984 units. Additionally, motorhomes declined, with shipments dropping by 12.5% to 4,040 units. 

RVIA advocates for a $140 billion sector, representing over 500 manufacturers and component suppliers. These members produce 98% of all RVs manufactured in the United States and approximately 60% of global RV production. It serves as a source of research, data, and analysis concerning the RV industry.

The association also oversees compliance with various safety and quality standards, including plumbing, heating, fire safety, and electrical systems.

To learn more about RVIA’s 2024 March Shipment Report, visit rvia.org.

Originally published by Modern Campground https://moderncampground.com/usa/rvias-march-2024-report-reveals-9-rv-shipment-increase-through-first-quarter/

May Newsletter

As another month rolls by, our industry is faced with a new, and potentially even more complex set of concerns.
 
For much of the last 3 years, dealers have seen credits on their income statements when it came to floor plan expense. With inventory levels continuing to rise, dealers are feeling the impact of the costs associated with the increased values of today’s vehicles and the growing numbers of days in inventory. To compound this, dealers across the country are sitting on thousands of unsold EV’s and some are struggling to come up with ways to move this inventory without taking a massive hit on their front-end gross. We have successfully created strategies within dealers’ reinsurance positions to offset most, if not all of their floor-plan expense. Let us know if you would like to explore a creative solution. 
 
Another issue dealers are, and will continue to face for the foreseeable future, is the compounding negative equity in the market. Per COX Automotive, the average negative equity is over $6,000 per vehicle. This will lengthen the trade cycle, compress front-end gross and limit opportunities for F&I. There are few tools to properly deal with this, and even fewer companies who know how to guide dealers through this. We are thankful for our partnership with AutoPayPlus whose program accelerates customers equity and can shorten the length of a customer’s loan term by 10% or more. Additionally, when a deal is enrolled with AutoPayPlus, we see an average increase of .9 products per deal, and an additional $512 in PVR. We would love to show you how to improve your customer’s equity position as well as increase your overall profitability, today, tomorrow and for years to come.
 
Lastly, there are a lot of people in our space who talk big but perform small. Although we may not shout it from the rooftops, we are extremely proud of the work we do for our dealers and the additional profits we help them generate, and keep. If you want to learn more about what it is like to have someone truly represent your full interest, please reach out to us to see if we are a good fit for you.
 
Sincerely,
 
Bob and Ryan

IN THE NEWS
Fed leaves rates unchanged, flags ‘lack of further progress’ on inflation
Is IRS Abusing its Authority in Micro-Captives Investigations?
EV Sales Growth Slows; Market Leader Tesla Stalls
Stellantis sales drop 10% in first quarter
RVIA’s March 2024 Report Reveals 9% RV Shipment Increase Through First Quarter

Events we will be attending: 
NAMAD – https://web.cvent.com/event/edcd733e-ea51-4261-842b-30b68f704934/summary
RVDA – https://www.rvda.org/Convention
F&I Product and Reinsurance Conference – https://www.fandi-conference.com/

Good luck and Good Selling!

Link to full Newsletter https://mailchi.mp/advdealer.com/may-newsletter-wwcephsrkn

More Trade-Ins Under Water

Trade-in vehicles in negative equity are at a two-year high, according to Edmunds data.

Of those traded in the fourth quarter for new-vehicle purchases, 20.4% were in negative equity, up from about 18% a year earlier and 15% two years earlier, Edmunds says.

The average debt level of borrowers in negative equity situations, meanwhile, climbed from $5,347 in the fourth quarter of 2022 to a record $6,064, which is up 46% from two years earlier.

Edmunds said that with renewed new-vehicle sales due to replenished inventories and the return of incentives, used-vehicle transactions have in turn cooled.

“With demand for near-new vehicles on the decline, used car values are depreciating similarly to the way they did before the pandemic, and negative equity is rearing its ugly head,” said Director of Insights Ivan Drury in a press release.

Consumers who paid more than manufacturer’s suggested retail prices during the pandemic are the most vulnerable to going under water because their newer trade-in models are most prone to big value declines.

The average transaction price of 1-year-old vehicles fell 15% in the quarter to $38,720, Edmunds said. ATP of 2-year-old models fell 9% to $32,583.

It’s the reverse of the pandemic scenario of scarce used vehicles due to supply constraints’ effect on new-vehicle production.

“During the last few years, consumers could jump into new car loans and their trade-ins were shielded from negative equity because some dealers, desperate for used inventory, were willing to pay near original purchase prices,” Drury said. “These days, consumers need to be more careful — especially if they’re trading in newer vehicles — because near-new cars are being hit the hardest by depreciation.”

Originally posted in F&I Showroom. https://www.fi-magazine.com/373319/more-trade-ins-under-water

2024 Forecast Reveals RV Industry Set for Significant Growth: Shipments Projected to Hit 350,000

The RV industry is poised for significant growth in 2024, with wholesale shipments forecasted to reach 350,000 units. This projection comes from the Spring 2024 issue of RV RoadSigns, a quarterly forecast prepared by ITR Economics for the RV Industry Association (RVIA). 

“RV shipments are trending in the positive direction and on track for the moderate gains ITR Economics is forecasting in this latest report,” RVIA President & CEO Craig Kirby said in a News & Insights report of the association.

The anticipated range of RV shipments for 2024 is between 334,700 to 365,500 units, centering around a median total of 350,100 units. Such figures suggest an increase of 8.8 to 18.8 percent over the 2023 year-end total of 313,200 units, indicating a robust recovery and expansion within the sector.

“Our data shows a continued desire from consumers to purchase RVs and experience the joys and benefits of the RV lifestyle. We are hopeful that the expected decreases in interest rates and inflation this year will allow more consumers to follow through with their desire to purchase RVs,” Kirby added.

The report identifies several economic indicators that support the optimistic forecast for RV shipments. Notably, housing starts, which historically correlate with RV shipments, are expected to rise in 2024. 

Additionally, the expectation of lower interest rates could make RV financing more accessible to potential buyers. The combination of receding inflation and increasing incomes is also expected to create a more conducive environment for the purchase of discretionary items like RVs.

Members of the RV Industry Association have the opportunity to gain further insights into the forecast through a webinar hosted by ITR Economics. Scheduled for Thursday, March 14, at 1 pm Eastern, this webinar aims to provide an in-depth explanation of the forecast, allowing industry stakeholders to better understand the factors driving the anticipated growth.

The RV Industry Association’s efforts to provide detailed insights and forecasts through publications like RV RoadSigns and events such as the upcoming webinar with ITR Economics play a crucial role in supporting the industry’s stakeholders. For more information about the RV Industry Association, click here.

Article originally published by Modern Campground https://moderncampground.com/usa/2024-forecast-reveals-rv-industry-set-for-significant-growth-shipments-projected-to-hit-350000/