After outpacing franchise dealers in total sales in 2023, independent auto dealers are enjoying another strong year.
Through April, more than 4.46 million used vehicles have been sold, according to NIADA data presented by Vice President of Dealer Development Jeremy Beck during the opening general session at the NIADA Convention and Expo.
Dealers finished 2023 with more than 12.75 million vehicles sold.
“The one thing that I want every single one of you to be proud of, which I reported at the end of 2023, is that for the first time in 13 years, according to NIADA data, you in this room outsold your franchise counterparts with total vehicles sold,” Beck said.
For 2024, sales were trending up before a slide back in April. Through four months, sales were down 19,000.
Dealers are working through increased reconditioning costs and continued inventory constraints from the past several years.
Dealers are paying on average $1,679 in reconditioning this year as compared to $1,455 last year. Since 2020, costs are up more than $500.
Independent dealers have an 82-day supply of vehicles, which is down one day from the end of 2023. The bulk of the inventory is coming from auctions, followed by other dealers, online, wholesalers and private sellers.
The high interest rates continue to impact consumers. According to data from Experian, the monthly payment on a used vehicle is up $2 from the end of 2023 at $523. The payment is up, while the amount financed has dropped from $26,571 to $26,073. The average interest rate is 11.9 percent. The average term is also above 60 months.
Weekly payments in the buy-here, pay-here space have grown from $103 last year to $116.
More and more Americans are falling behind on car payments. The 30-day delinquencies are up to 2.5 percent. The 60-day delinquencies are at 1 percent. Data by Morning Consult also shows many people are struggling to pay emergency expenses, including car repairs.
“Not only can half of our consumers not pay that $400 emergency expense, they’re also past due on their auto loans,” Beck said.
Buy-here, pay-here charge-offs for independent dealers have risen to $5,024. That is up from the $4,919 at the end of 2023. Delinquencies and recency in the sector are up slightly from 2023.
“We can see that the trends continue to be that delinquencies are going up, which means that recency, the amount of your consumers who are actually paying a payment on a consistent basis over those various different time periods, continues to be impacted,” Beck said.
Beck urged dealers to use the data to guide their education throughout the convention and compare the numbers to their businesses.
He also said the data plays a key role in advocating on behalf of the industry with legislators and regulators.
“One of our primary responsibilities is to help to educate you and to help to educate others about the valuable service that you provide every day to underserved consumers every single day, who likely would not have a vehicle if not for you,” Beck said.
