Jeremy explains that sales were down slightly for the month of July with about 4% year over year and sales coming in around 1.36 for a SAAR of 16.5. Jeremy says that this is the lowest SAAR we have seen since the middle of August 2017.
However, Jeremy says that this should not alarm dealers too much. Overall it was still a pretty strong month for dealerships and there is strength that is expected to come from the second half of 2018. “We do expect to slow down, this should represent normal, but hitting that 1.3, 1.35 mark is really strong for dealers, and there is definitely enough meat on the bone for them to have a ton of sales.”
A few weeks ago, President Trump announced that GDP was at 4.3% and that interest rates are going to be held where they are for now. Even with these interest rates remaining at around 6%, this is significantly higher than how we started the year. With the stock market continuing to grow, July was expected to bring stronger sales. But what we saw this July, which was unusual, was dealerships shying away from incentives, when usually we can count on a healthy amount of 0% sales in the summer season. In addition to this, leasing for used cars and CPO’s is at record levels and it is expected that about 4 million used off lease vehicles will be hitting the market in 2018. Jeremy says both of these factors play a part in the decline in sales.
For August, Jeremy says that Edmunds predicts a continuing slight decline. SAAR is expected to be around 16.8 and 16.9, which is closer to the pace that they are expecting to see for the remainder of the year. For more information, check out the full interview with Jeremy above.