Inventory is scarce right now, that’s no secret, and the used car market has been hit especially hard. This has left many dealers wondering how and when their pre-COVID inventory levels will return. Here to talk about the current state of inventory supply and the impact it will have on the industry over time is Michelle Krebs, Sr. Director of Automotive Relations for Cox Automotive and Executive Analyst for Autotrader.
According to recent research by Cox Automotive Chief Economist Jonathan Smoke, inventory levels are the lowest they have been in nearly nine years. With many dealers having lower used-day supply, and the prices of used inventory at all-time highs, many dealers are feeling the impact of the industry shutdown we saw earlier this year.
Despite this, Krebs is surprised to see the resiliency of the consumers who are back in the market. She also notes that dealers have been incredibly flexible and adaptable during this time. In fact, Autotrader believes that August will be the fourth consecutive month of higher sales. Krebs also predicts about a 14.9 million SAAR for the month. However, unlike last year, Labor Day sales will not be included in these numbers.
One of the big problems is the lack of inventory. Both the new and used sides have never seen levels this low. Autotrader monitors these levels and listing prices every week. For the last two weeks, Krebs reports that the average used listing is over $20,000. In light of this, Krebs says dealers will have to be resourceful with their trade-ins and leases.
Michelle Krebs is an acclaimed auto analyst and automotive writer with nearly 35 years covering the auto industry nationwide and globally. Krebs previously was a senior auto analyst and editor for the website Edmunds.com. She is also a frequent contributor to Forbes.com, The New York Times, and Motor Trend to name a few.
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