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2019

September

CPO IS PERFORMING BETTER THAN YOU THINK- by Ben Bartosch--There is way more than meets the eye when it comes to understanding the Certified Pre-Owned (CPO) environment. As we reach the halfway point of 2019, a basic analysis of the CPO market shows a solid -- if unremarkable -- performance. While the CPO market grew by 2% in terms of sales this year, a cursory evaluation might lead to the conclusion that dealers are better off sticking with regular used-vehicle inventory -- since that market expanded by 6%, or three times the rate of CPO. Read The Full Article

August

ANALYSIS: Mass market outperforms luxury segment by higher than normal margins-- by David Paris--ANALYSIS: Mass market outperforms luxury segment by higher than normal margins.  Read The Full Article

VIN Data offers lenders opportunity to optimize revenue while mitigating risks
-- by Andrew Stowe--When it comes to managing risk, more data and context is better than less. It is especially true in the half-trillion-dollar U.S. automotive financing market — an arena that features intense competitive pressure to rapidly approve and process loans for new and used vehicles in almost real time. The objective, after all, is to make it possible for consumers to drive off the lot within hours of reviewing, test-driving and selecting their dream car. Read The Full Article

July

ANALYSIS: As take rates rise, ADS features positively affect used-car valuations-- by Ben Bartosch--Vehicle take rates of automated driving features are steadily rising as consumers purchase new vehicles, with the secondary market recognizing the added value placed on these attributes reflected in resale pricing. While we are still in the early days of understanding how quickly the industry will move through the NHTSA’s Automated Driving System (ADS) taxonomy, recent analysis of VIN configuration data from J.D. Power shows that used-vehicle buyers place high value on these technology features. Read The Full Article

Ride-hailing could offset decline in sales
-- by Andrew Stowe--An estimated 2 million ride-hailing drivers are in business across the major service providers — Uber and Lyft — and beyond in the U.S. As that number grows, full- and part-time drivers are emerging as an interesting market for the automotive ecosystem. Read The Full Article

ANALYSIS: Tesla defines EV sector while driving overall industry in luxury market sales-- by David Paris-While there has been no shortage of Tesla-driven headlines lately, it is easy to lose sight of some fundamental points that often get ignored. Tesla is dominating the electric vehicle (EV) market by a wide — and growing — margin. The new Model 3 closed out the first quarter of 2019 as the best-selling luxury EV in America, accounting for 15% of the total upscale segment, which includes both internal combustion and EV deliveries. It’s also worth noting that Tesla’s Model 3 was the 13th best-selling vehicle across all luxury and mass market categories. No other luxury model has ever cracked the top 20 spots in overall vehicle sales rankings. Read The Full Article

June

COMMENTARY: Tech-dependent millennials step up to dominate used-vehicle purchases-- by Maya Ivanova--Forget what you think you know about millennials* and their relationship with automobiles. Fears that Gen Y — those between 25 and 42 years of age today — would turn their backs on the all-American car-buying tradition are unfounded. To be sure, there was some initial cause for concern. As this demographic came of age at the end of the last decade, the Great Recession dampened the economic outlook. Jobs were scarce as their first student-loan payments came due. This, coupled with the unexpectedly rapid rise of ridesharing services like Uber and Lyft and alternative car-share business models like Zipcar, prompted many pundits to pronounce the death of conventional car ownership with this generation. Read The Full Article

Car Dealers, Automakers Face Affordability Implications
-- by Andrew Stowe--Life has become more expensive for consumers looking to get into a new vehicle. Even controlling for the overall consumer shift to pricier SUVs and trucks, the average transaction value per vehicle over the past year has risen by approximately $1,000, crossing the $33,000 mark for the first time this year. Read The Full Article

May

J.D. Power's inaugural Residual Value All-Stars: Luxury vehicles-- by David Paris--Vehicles that retain a strong residual value offer an unmistakable benefit to automakers and consumers alike. Such models allow for a competitive cost of ownership and leasing advantage, with some being better values when it comes to leasing. One of the biggest factors in the total cost of a lease is the vehicle's residual value. This is especially important on the luxury side of the market because leasing tends to be more popular in this sector than on the mass market side. Read The Full Article

EVs Continue Steady March Toward Growing Industry Presence in U.S.
-- by David Paris--As the total cost of ownership continues to decrease, EVs are becoming an increasingly common sight on American roadways. This is being driven by changing consumer attitudes as EV technology improves to support wider operating areas, curbing the range anxiety objections that served as a barrier to purchases in the past. As a result, this segment of the market is posting double-digit growth in adoption. As we closed the first quarter of 2019, J.D. Power reports that year-to-date EV sales crossed the 61,000 unit mark, representing 10.6 percent uptick over the same period a year ago. Read The Full Article

As Vehicle Sales Soften, Expect Lenders to Play Harder
-- by Andrew Stowe--The business of auto lending remains immense. More than half a trillion dollars are borrowed every year by American consumers to buy cars – even as vehicles get more expensive and interest rates hit levels higher than they have been in two years. Read The Full Article

April

J.D. Power's inaugural Residual Value All-Stars: Mass-market-- by Maya Ivanova--Vehicles that maintain high residual/resale values deliver unmistakable benefits to all segments of the automotive ecosystem. Stronger values give manufacturers the ability to offer the market a competitive total cost of ownership advantage that can have a tangible effect on consumers and dealers alike. But what vehicles have the best residual values today? Which ones, among the mass market brands, are at the top? Read The Full Article

Delinquencies are rising, but marketplace is stable... for now
-- by Ben Bartosch--Lately, there has been no shortage of headlines expressing concerns about the rising number of consumers approaching — and crossing — the 90-day delinquency mark on their auto loans. It has been especially alarming to the captive lending community as dealerships across the country move to close deals and move inventory off their lots. Read The Full Article

March

ANALYSIS: Tax refund season may not deliver usual ‘shot in the arm’ to auto industry-- by David Paris--Consumers across the country are assembling their tax documents to beat the April 15 deadline to file their returns with the Internal Revenue Service. For wage earners that have not experienced a significant change in their employment status, this is also the season to begin planning how to invest their expected tax return. Read The Full Article

Supply and Demand Factors are Altering the SUV vs Sedan Market-- by Ben Bartosch--The dramatic embrace of sport utility vehicles by U.S. consumers is having a seismic effect on the production strategies of automakers. Although passenger cars historically have dominated American car buyers’ preferences, in just five years, SUVs have supplanted the traditional family car. Read The Full Article

CPO Programs Benefit OEMs, Dealers and Buyers
-- by Andrew Stowe--The certified pre-owned vehicle market has experienced consistent growth over the last several years. At J.D. Power, we expect to see this trend continue in 2019. The new-car affordability squeeze felt by many consumers contributes to the growing appeal of used cars. Read The Full Article

February

ANALYSIS: Used-car residual values review and forecast for 2019-- by Jonathan Banks--Residual values for used cars rose by an average of 3 percent in 2018. The growth in value represents a remarkable turn of events from 2017 when there was significant pessimism about the state of the used-car market. The negative sentiment a year ago was driven by concerns that a glut of used vehicles coming back to the market would cause serious price erosion. Read The Full Article

January

ANALYSIS: Loyalty drives repeat brand purchases and trade-ins for CPO vehicles-- by Maya Ivanova--When it comes to repeat business for automotive makes and models, customer loyalty associated with the certified pre-owned vehicle market significantly outperforms those associated with traditional used-vehicle offerings. However, dealers who want to push the CPO product are challenged by a lack of consumer awareness. Read The Full Article

2019 Auto Market Analysis: Tighter Credit, More Used Vehicles
-- by Ben Bartosch--Aggressive advertising, generous financing offers of 0 percent APR for 72 months and surges in employment made the 2018 end-of-year sales season a memorable one. But as we look ahead, a range of risks – including global trade dynamics, customer sentiment and other variables – pose the potential for disruption that will have to be managed in 2019. Read The Full Article