Cox Automotive Auto Market Report: Oct. 15

Cox Automotive’s Auto Market Report video delivers a comprehensive analysis of the current automotive market. Chief Economist Jonathan Smoke leads our effort to translate data and trends into actionable insights. This video covers a wide range of topics, including consumer spending patterns, consumer sentiment, retail vehicle sales, financing rates, supply dynamics, pricing trends and leading indicators from Cox Automotive’s extensive data ecosystem.

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Report Summary – Oct. 15, 2024

• Consumer spending growth showed a negative trajectory during the second half of June and has exhibited weakness since.
• The Index of Consumer Sentiment shows an increase of 1.1% in October, following a 1.4% rise in September.
• The sales for new and used vehicles have been on a downward trend for four consecutive weeks due to the impact of hurricanes.

Declining Consumer Spending

The auto industry has been hit by a downturn in consumer spending, which started in the second half of June and has remained relatively weak since.

• This decline is evidenced by a year-over-year change in total spending by week over the trailing 52 weeks, as of September 14, 2024.

Consumer Sentiment on the Rise

In a positive sign for the auto industry, the Index of Consumer Sentiment was up by 1.1% in October after increasing by 1.4% in September.

• Despite the overall downturn in consumer spending, consumers seem to be feeling more confident about the economy.

Weather-Impacted Vehicle Sales

Sales for new and used vehicles have seen a decline for the past four weeks, due to the adverse impacts of hurricanes.

• The data shows a consecutive four-week drop in retail vehicle sales.
• However, it’s important to note that this decline could be temporary and influenced by weather conditions.

Financing Trends

The mix of auto loan rates below 3% has seen a downward trend, hitting the lowest level of the year.

• The average auto loan rates have remained largely unchanged even after the Federal Reserve’s rate cut.
• The average used rate sits at 13.94%, and the new rate at 9.45%.

Supply Dynamics

While supply for new vehicles remains stable, the supply for used vehicles has been gradually recovering, though it continues to be lower year over year.

• The new-vehicle supply remains higher when compared to the previous year, despite the declining sales.
• Used-vehicle supply is still tight, but showing signs of recovery.

Price Patterns

Used-vehicle prices continue their decline, with the average retail price for Model Year 2021 vehicles falling by 0.2% in the most recent week. This followed a drop of 0.5% in wholesale prices.

Leading Indicators

Leads and service trends are showing mixed results.

• Leads: Leads on Autotrader and Kelley Blue Book are up year over year in October and are up for the month compared to September on KBB.com but down on Autotrader.
• Dealer Metrics: Unique leads per dealer are down year over year in October for new and used vehicles on websites hosted by Dealer.com, but new and used leads are up for the month compared to September. Unique credit applications per dealer on Dealertrack were up 5% year over year last week, with the trend in applications per dealer declining week over week.
• Service Trends: Service trends on Xtime declined, with completed appointments down 2.0% year over year.