“We’re going to be in this limited used-vehicle inventory environment for a while. “With all of the issues we’re having with new production, used returns are going to drop in the next several years, and that’s going to keep used prices high,” Yurchenko said. Pre-pandemic, there were more than 3 million vehicles on dealer lots, according to Yurchenko. As a result, rental fleet sales will be at historically low levels for the third consecutive year. The big question is whether manufacturers can produce enough vehicles to satisfy the dealers and rental companies. He added that dealers are fighting to be first in line to get inventory. “The majority of consumers are paying above sticker price, which was unheard of a few years ago,” Yurchenko said.
The average incentive in March 2022 was close to 3.5%.īlack Book expects month-over-month growth in new vehicle sales for the fourth quarter of 2022, yet total light-vehicle sales are only expected to reach 15 million this year. Pre-pandemic, the average incentive was about 11% of MSRP, according to Yurchenko. Inventory limitations and new sales incentives keep hitting record low levels every month. Yurchenko believes the most optimistic forecast is that the industry will reach some sort of normalcy in terms of production levels by 2023, but dealer lots are not going to return to normal levels anytime soon.
Supply-chain issues - including the ongoing chip shortage - are still the biggest factor right now driving this whole scenario. Numbers are still low, but the volume of repossessions is increasing.” “Recent trends point to an increase in repossession volume. “We’re talking about 1 million vehicles per year,” Yurchenko said.