J.D. Power’s Jonathan Banks on the future landscape for new and used vehicles

Will the used car market continue to grow? On today’s show, we’re pleased to welcome Jonathan Banks, Vice President and General Manager for Vehicle Valuations at J.D. Power. He gives his perspective on the future trends for new and used vehicles.

Banks begins the conversation by sharing his take on the overall health of the auto industry so far this year. Banks says it’s been a challenging, yet unique and positive market.

The retail inventory tracker is a new tool that J.D. Power has built. As you can imagine, inventory is really low. According to their calculations, it’s under a 25 day supply. Based on data, you may see growth in inventory in 2022, with production normalcy midyear third quarter. Banks says used cars will continue to play an important role in overall dealer profitability and sales.

Year over year prices is up between 25 and 30 percent. The average increase is about $4,200, and with pickups, the number can increase from $10,000 to $15,000. Banks says this allows customers to come in with high equity on their trade-ins. He also believes used cars will be a healthy business for everyone as long as demands keep up.

Banks say they have broken down the used vehicle impact into 6 categories. They are vehicle production, used vehicle supply, incentives, new vehicle transaction prices, the economy, and wealth. He says these all will perpetuate into 2022, except vehicle production.

Banks wraps up the conversation by sharing his thoughts on the data, dealers are utilizing. Bank says he’s impressed by the data, dealers are using to make sure they get the right cars, paying the right amount, and pricing them correctly on retail. He says, the market is becoming very smart, and it’s a great time to be in the industry.

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