Category: Automotive

Not So Fast. This Won’t Be Quick & Painless.

Not So Fast. This Won’t Be Quick & Painless.

The 2008 downturn and the current downcycle have similarities as far as investor sentiment is concerned. We believe that investor sentiment will sour early next year as Q4 2022 earnings reports come in. 2023 earnings estimates and stock prices will move lower off of the Q4 EPS reports. Early cycle disbelief. I recall that in … Continue reading Not So Fast. This Won’t Be Quick & Painless.

Wholesale Used-Vehicle Prices Decline Further

Wholesale Used-Vehicle Prices Decline Further

The Manheim/Cox Automotive team released its used vehicle price index through the first 15 days of October. Used vehicle values continued to decline as one would expect. We expect further declines this year and next as we wrote back in early October. Used vehicle valuations and sales are typically a leading indicator as it relates … Continue reading Wholesale Used-Vehicle Prices Decline Further

The Ticking Consumer Time Bomb

The Ticking Consumer Time Bomb

Consumer spending is poised to take a nose dive. Outstanding consumer credit has expanded to approximately $911 Billion at a time when credit card interest rates are approaching 17% and likely to go higher (see chart below, click the caption link to expand the chart). As the Federal Reserve lifts interest rates and pushes the … Continue reading The Ticking Consumer Time Bomb

Used Vehicle Prices Decline As Rates Climb

Used Vehicle Prices Decline As Rates Climb

Used vehicle prices continue to decline as have sales volumes. This is not unexpected as interest rates have climbed over the past number of months. Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis), decreased 3.0% in September from August 2022. The non-adjusted price change declined 2.3% year-over-year in September. September was the … Continue reading Used Vehicle Prices Decline As Rates Climb

A Softening Used Car Market Does Not Bode Well for The Economy

A Softening Used Car Market Does Not Bode Well for The Economy

The auto loan market is a leading indicator to the broader economy. Used car values are near record levels but have traded lower for three consecutive months. More used car loans will be underwater as used car values decline. Thus, the risk of loan default rises. LTV's exceed 100% while underlying asset values decline. This … Continue reading A Softening Used Car Market Does Not Bode Well for The Economy