CARY, N.C. -

Used-vehicle sales are expected to fall more than 4 percent for both franchised and independent dealers this month, making up the entirety of the 0.4-percent overall decline CNW Research is predicting for July’s used-car numbers.

Such declines may give credence to one of two theories CNW laid out to explain another used-car phenomena being spotted this month: increased supply.

The firm said in its latest Retail Automotive Summary that used days supply for the month is up 0.39 percent.

“What it portends, at this point, is hard to determine because many of the larger used-car sellers such as AutoNation and CarMax are scouring hills and dales to find middle-aged models for their lots and putting those vehicles in inventory,” CNW president Art Spinella said in the report. “Larger inventory results in higher days’ supply.

“The alternative scenario is that the industry isn’t selling vehicles as quickly and that’s causing a backlog of cars and trucks,” he continued. “Unfortunately, the latter alternative is reflected in a slight decline in used sales this month — about 0.4 percent.”

Franchised dealers are expected to sell 1.68 million used units in July, down 4.5 percent year-over-year, while independents will likely move 1.47 million used cars (down 4.8 percent).  Oddly enough, casual sales are likely to rise 10.6 percent and come in at 1.42 million.

As for year-to-date figures, CNW is projecting that even with July’s softness, sales through seven months would still be up 0.7 percent at 24.91 million. But again, the entirety of that increase would be for casual sales (up 3.4 percent).

The firm is forecasting 0.4-percent declines for the seven-month sales tallies for both independents and franchised dealers.

On the new-car side, CNW  is predicting an only slightly rosier picture, saying July will likely be “marginally good” for new sales.

As to why, the firm cited a 1.46-percent month-over-month increase in its “Jitters Index” for July — which measures consumer concerns that may impact auto buying — as well as floor traffic that increased only modestly in the first half of the month, plus dealership closing ratios so far that have dropped 6.78 percent year-over-year and 9.08 percent month-over-month.

These trends have occurred amid a downturn in pent-up demand and a “horrible slow-down of sales during the second half of June,” Spinella noted.  

“July sales should be an improvement versus a year ago, but as of this date, it looks as if the total units delivered will be hard pressed to top 1.36 million units unless some serious incentive money is spent. That’s a 3-percent increase versus a year ago,” he said.

But while there may have been some softness in the new-car market during the latter half of June, the overall mood for the month — and for the first half of the year — was positive.

In addition to the strong indicators that CNW cited midway through the month in the June RAS — a slower trepidation among consumers, stronger same-store sales and floor traffic increase, to name a few — Autodata Corp. reported in early July that June’s new-car sales climbed 1.2 percent year-over-year and reached 1.42 million units.

Autodata said this resulted in the best new-car SAAR (16.98 million) in almost eight years.

Likewise, a report from Cars.com issued this week also reflected a substantially strong new-car market during the first half of the year, with new-vehicle sales increasing 4.5 percent.

Not to mention, Cars.com chief analyst Jesse Toprak is calling for 8.1 million more new cars sold throughout the rest of the year, bringing his full-year sales forecast to 16.3 million. Previously, it was at 16.1 million.

In talking to Auto Remarketing on Wednesday about the new-car market, Toprak said the product automakers are putting out is the “best we’ve ever seen.” He also pointed to stronger credit availability and low interest rates, among other factors.

“Despite the expected year-over-year dip, the pace of new-car sales remained healthy in June at approximately 16.4 million SAAR,” Toprak said in the analysis provided by Cars.com.  “An attractive collection of new models as well as improved affordability due to very low interest rates and lease specials continued to bring customers into showrooms. We expect the rest of 2014 to continue to track above 16 million units.”

Going back to his point on leasing, Toprak told Auto Remarketing that year-to-date lease penetration of new-vehicle sales is at 26 percent. To put that in perspective, he said, compare that to the lowest point in recent history, when lease rates hit 11 percent in 2009.

One sense in which leasing can be positive is that it “enables consumers to get more car for their money,” he added.