Cox Automotive Auto Market Report: Dec. 10

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 – Dec. 10, 2024

Highlights

Current State of the Auto Industry: December 2024

Key Highlights:

• Retail vehicle sales have shown significant strength, surpassing 2023 levels.
• Low-interest rate deals have surged to their highest levels in two years.
• Consumer sentiment reached a 3.5-year high post-election, despite recent fluctuations.

Consumer Spending and Sentiment

Consumer spending trends were notably volatile in September and October due to hurricanes Helene and Milton. However, the Index of Consumer Sentiment saw a 5.6% increase in November, reaching a 3.5-year high post-election, though it has dipped slightly by 0.8% in December.

• Spending was impacted by natural disasters, reflecting a temporary dip.
• Sentiment improvements indicate a positive outlook among consumers, despite recent declines.

Retail Vehicle Sales

Retail vehicle sales, both new and used, have been robust over the past month, maintaining higher levels compared to 2023.

• New and used vehicle sales have shown resilience and growth.
• The market’s strength is a positive indicator for the industry’s recovery and stability.

Financing Trends

Low-interest rate deals have risen significantly in November and early December, reaching the highest levels in two years. However, average auto loan rates have seen a slight increase at the start of December.

• Low APR financing options are more prevalent, benefiting consumers.
• Average auto loan rates for used vehicles are at 13.76%, while new-vehicle rates are at 9.01%.

Supply and Pricing

The supply of new vehicles remains higher but has declined recently, while used vehicle supply is much lower year-over-year. Retail prices for model year 2021 vehicles have seen a slight decline.

• New-vehicle supply is tightening, impacting availability.
• Used-vehicle prices are converging, with both retail and wholesale prices showing minor declines.

Leading Indicators

Leads and service trends are positive.

• Leads: •Leads are up year over year so far in December on Autotrader and Kelley Blue Book, and leads are down for the month compared to November on both sites.
• Dealer Metrics: Unique leads per dealer for new and used vehicles are up year over year in December on websites hosted by Dealer.com, and new and used leads are up for the month compared to November. Unique credit applications per dealer on Dealertrack were up 9% year over year last week, with the trend in applications per dealer improving week over week.
• Service Trends: Service trends on Xtime relative to last year improved last week, as completed appointments were up 4% year over year.