A spring sales bounce that has been late coming and more spread out than expected has now led to used-vehicle supply steadying in April, according to a recent Cox Automotive analysis of vAuto Available Inventory data. The average retail list price, however, rose again, topping the $28,000 mark.
At the end of April, the total supply of unsold used vehicles on dealer lots across the U.S. stood at 2.52 million units. That compared with Cox Automotive’s revised number of 2.53 million at the end of March. Inventory opened May nearly 12% above year-ago levels.
Days’ supply at the end of April rose to 48, due to a lower retail sales rate, compared with a revised number of 42 at the end of March. Days’ supply in April was 38% above year-ago levels. The Cox Automotive days’ supply is based on the daily sales rate for the most recent 30-day period, in this case, ended May 2. Sales for that period were down 19% from the same time a year ago.
As is traditionally the case, used-vehicle supply had been building in the early part of the year until mid-February, the kick-off of the tax refund season when consumers often use an influx of cash to buy used vehicles. Although inventory levels remained above year-ago levels, the supply began edging downward as spring approached and sales picked up.
But the traditional spring sales bounce failed to produce any notable retail lift in April. In fact, Cox Automotive estimates used retail sales declined 13% in April from March and were down 21% from a year ago.
Tax refund season started slowly this year. Critical mass was finally achieved in April, and more cash is coming in May. Through April 29, 71% of projected refunds for the year had been issued, when in 2019, 99% had been by the same week. However, the average refund is up 11% versus 2019 and up 5% from a year ago to the highest refund ever recorded at this stage of tax refund season.
Rising vehicle prices may have scared off some consumers as financial conditions of many households worsened due to inflation and high gas prices. The average listing price at the end of April was $28,365, surpassing the $28,000 mark for the first time since December 2021. The average list price was $27,475 at the end of March.
“Prices remain high, but the growth rate for prices should begin to slow as the anniversary of the global computer shortage arrives,” said Charlie Chesbrough, Cox Automotive senior economist, in a news release.
Wholesale used vehicle values, according to the Manheim Index, declined 1% in April on a seasonally adjusted basis. The decline left the Index at 221.2, which was up 14% from a year ago. The non-adjusted price change in April was an increase of 2.9% compared to March, leaving the unadjusted average price up 16.4% from a year ago.
The price categories from $15,000 to $30,000 represented the bulk of supply. More than one million of the 2.52 million vehicles available are in that range, according to Cox Automotive’s analysis of vAuto Available Inventory data. Days’ supply for those categories ranged from 43 to 51. The lowest priced segments – up to $15,000 – had the lowest supply and the lowest days’ supply of 30 to 36. Vehicles priced above $30,000 had at least 60 days of supply.