Pre-COVID Trade Pricing is Back
The average new car dealer-to-dealer trade price continued its fall last month, dropping to -$633 under invoice, on average. This means that new car dealers that wish to sell their inventory to other new car dealers need to consider giving up holdback, advertising, and more in some cases to move certain units off their lots.
The February Trade Index is based on 1,050 traded vehicles throughout the month of February.
633
81% of the traded units that made up this index were Chevy, RAM, Jeep, Ford, Nissan, and GMC models.
752
This was a -752% decrease from the previous month’s trade index price while reported units on the ground remained over 1.8M for the third consecutive month.
The price that selling dealers are able to command is correlated with vehicle days supply. We are seeing that some vehicles with less than a 30 days supply are still able to receive prices over invoice in trades with other dealers.
One factor contributing to higher vehicle supply could be a continued decrease in auto loans. The website, Finder.com, is showing that the number of auto loans in America peaked in the first quarter of 2020 and has been decreasing, quarter-over-quarter, since that time.
Additionally, the new car dealer-to-dealer trade index began sliding significantly, month-over-month, back in October 2022 – when the Motley Fool reported that it was more difficult to get an auto loan due to tightening lending standards, higher interest rates, and higher prices on new automobiles.
The average price that selling dealerships were able to receive just one year prior, in February 2022, was $4,996 per unit and there were less than 1M units on the ground.
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About the New Car Average Dealer-to-Dealer Trade Price Index
Dealer Trade Network’s New Car Monthly Dealer-to-Dealer Trading Price Index shows the average monthly price, relative to the vehicle’s invoice price, that new car dealerships pay other new car dealerships for new units.
About Dealer Trade Network
Dealer Trade Network uses market data and machine learning to help new car dealerships turn their floorplan faster, leading to increased revenue and higher margins. Over the last 12 months, the company facilitated the trade of 7,284 units between new car dealerships.
