Sales Forecasts

2016 CPO sales likely to top previous record


Cox Automotive chief economist Tom Webb fully expects this year’s certified pre-owned vehicle sales total to surpass what the industry generated in 2015, which was 2.55 million units.

During his quarterly conference call with the media and other industry observers this week, Webb projected that this year’s CPO sales figure might land near 2.7 million, perhaps even 2.8 million units, which means the industry is likely to produce a robust or perhaps even record-breaking quarter to close 2016.

According to Autodata Corp., CPO sales came in just above the 2-million mark through Sept. 30, a figure 3.7 percent higher than the amount registered at the same point last year. The industry is coming off consecutive quarterly performances that established a new record (the Q2 figure of 678,169 units) as well as the second-best figure (the 675,725 units turned in Q3).

During the fourth quarter of last year, the industry moved 624,624 CPO units for a 4.8-percent hike. Webb indicated “the year-to-date increase we’ve had through September might end up being a little bit less by the time we get to the end of this year simply because there were some high sales last year.”

And with off-lease volume projected to hit 3.6 million next year and likely to approach 4 million lease returns in 2018, the raw material is there for plenty of CPO sales, according to Webb.

“Certainly the off-lease units create the inventory for those programs,” Webb said. “They also put some pressure in terms of the lessors supporting the programs in order to protect residual values for end-of-term units.

“To a certain extent, it relies on the efficiency of your dealership network because there are certain franchises, primarily on the luxury side, where in terms of the dealer’s lots, it’s basically all CPO units or a very high majority are CPO units of that brand,” he continued. “Do they have the potential for greater throughput there? Once it’s outside the franchise network, it’s no longer going to be certified.

“The decision to CPO a unit or not CPO a unit is the dealer’s, so that it’s a profit opportunity to do or not to do that,” Webb went on to say.

Beyond the raw sales figures, Webb said it’s that opportunity to generate margin that’s driving dealerships to move CPO metal.

Dealerships’ certified divisions, in part, have turned the tide of diminishing margins. Webb pointed to performances of the publicly traded dealer groups as evidence of the trend.

“There has been some players out there in terms of the publicly traded who are doing a good job and have actually tried to protect gross margins on the used-vehicle side,” he said. “It was getting a little dicey there as they kept driving margins lower. I think there is a little bit of protection of that gross margin and to a certain extent you sacrifice volume because of that.

“We just got to a point where the margins got as low as they can get. A lot of the easy efficiency gains in order to allow that margin reduction had already been achieved. I think we sort of level off from here,” Webb added.

And to keep margins steady, it’s the certified pre-owned model that’s literally the vehicle to get dealers there, especially within franchised operations.

“Typically the bulk of their sales are units under 5 years old unless they’re setting up a separate lot to handle those older units,” Webb added.

Expectations for September used-car sales

CARY, N.C. - 

Including numbers from franchised and independent dealers plus private-party sales, there will likely be somewhere in the neighborhood of 3.2 to 3.3 million used-vehicle sales this month.

That’s according to respective forecasts from and TrueCar.

Edmunds is calling for 3.3 million used sales this month, which would translate to a seasonally adjusted annualized rate of 38.6 million. That’s up from 3.2 million sales in August with a steady SAAR.

Meanwhile, TrueCar is forecasting 3.23 million used sales, which would be a 1.9-percent year-over-year decline. 

Gauging whether a leasing bubble is inflating


A couple of years ago when pundits and naysayers wanted to discuss auto financing, often they gravitated toward how the industry’s recovery stemmed from subprime activity, resulting in a possible bubble similar to what created the Great Recession.

While analysts and experts eventually extinguished that line of thinking by showing performance data, these same industry folks could soon be refuting notions that another auto bubble is inflating — but this time because of leasing.

Earlier this month, Experian’s latest State of the Automotive Finance Market report highlighted leasing volume as a share of all new models financed set another record during the second quarter. Analysts indicated leasing continued its strong growth as the share of new vehicles leased jumped from 26.92 percent in Q2 2015 to a record high of 31.44 percent in Q2 2016.

Then this week, J.D. Power and LMC Automotive indicated that they have never seen franchised dealers slap as much cash on the hood as they are seeing this month to keep new metal turning.

Analysts reported on Monday that incentive spending thus far in September is at a record level of $3,923 per unit. That figure surpassed the previous high of $3,753 set in December 2008.

To gauge whether these trends should be triggering alarms, we visited again with Anil Goyal, senior vice president of automotive valuation and analytics at Black Book, which pushed out online survey results involving more than 500 auto finance company executives. The survey released this week showed a large number of auto finance companies say they don’t leverage residual data for their portfolio despite the majority of finance companies admitting that portfolio risk assessment and remarketing remain at the top of their portfolio strategy for a growing number of used vehicles.

“The environment we are in is more volatile with trends that are very different than what we’ve seen in the last five years, with more supply coming back, with more incentives on the new vehicle sales and leases, with increased use of leasing,” Goyal said.

“There is increased risk around residuals in both loan and lease portfolios in trying to understand what that vehicle might be worth when it’s returned or repossessed,” he continued.

Goyal recapped that projecting residual values certainly is challenging for automakers and their captives since there are “a lot of moving parts.” The OEM must coordinate production schedule, work with suppliers and forecast how much demand for a particular model there might be.

And if their projections are off, Goyal pointed out automakers can join forces with captives to incentivize their customers to take delivery. They can simply reduce the vehicle price; that's the cash on the hood. They can reduce the APR, especially since captives originate leases mostly with prime and super-prime customers.

Also, they can offer a subvented residual enhancement. For example, if the residual value projection for a vehicle is 55 percent of its worth as a new model after three years, the OEM and captive can bump up the level to 60 percent in order to make the customer’s lease payment more manageable.

“There’s a lot of those levers that the OEM and the captives have to play around with to ensure that they are making the sales on their existing vehicles and keeping their pricing competitive with others and monitoring that scenario to make the lease payment work,” Goyal said.

But off-lease vehicles are increasing in the wholesale space. Certified pre-owned sales continue to set records, but what if retail demand for those units diminishes?

“Definitely the risks in the leasing scenario are increasing. Essentially, the captive and manufacturers sometimes when they share the risk, you’re essentially pushing the losses to the back end. You’re making the sale, but you’re going to have a loss,” said Goyal, who is one of the experts coming to Used Car Week at the Red Rock Resort and Casino in Las Vegas Nov. 14-18.

“In the last few years, used-car values have been very strong, so in many cases the vehicle that got returned there was not a loss,” he continued. “In fact, in many cases there was a profit to be made because the values were higher than the residuals, especially on SUVs and trucks. But that has really propelled lease penetration.

“The forecast is lower now for where the values are going to be,” Goyal went on to say. “If more and more leases are essentially made feasible to keep that payment lower through subvented residuals, you’re now going to have a situation where the losses will start to appear on the returns.”

So does leasing bubble talk have merit? Goyal didn’t go to that degree during our conversation on Wednesday. He reiterated how leasing is primarily in the prime and super-prime credit tiers. He added rating agencies often make conservative forecasts when making their analysis of securitizations filled with leases.

“We don’t see it as a bubble, but I do think there is an increased risk developing,” Goyal told Auto Remarketing. “That essentially limits how long leasing can grow.

“If we have higher and higher incentives to make the leasing work, you’re essentially moving from selling that vehicle to really just providing the vehicle on a three-year lease and pushing out your losses as a captive and manufacturer,” he continued. “That’s a trend that could be disturbing if it continues to grow by increasing the risk in the system.”

To help mitigate that risk, Black Book’s latest white paper, “How To Grow a Profitable Used Leasing Portfolio,” can help finance companies identify which vehicles make good used leasing candidates for their portfolio. It is available for download by clicking here.

“You don’t want to have unexpected surprises,” Goyal said. “What we promote to our lenders is not a one-and-done kind of analysis. Rather it’s something that’s ongoing, a refresh of the forecast because the trends are changing.”

Have auto sales truly reached their peak?

CARY, N.C. - 

The latest Kerrigan Auto Retail Index report raises a question: Did U.S. auto sales peak in 2015?

According to the report, new-vehicle retail sales in August are expected to be down 6.5 percent from a year ago, which marks the fourth month in the last six with declining retail auto sales. In contrast to predictions earlier in the year, SAAR projections for 2016 are now expected to come in lower than 2015.

The Kerrigan Auto Retail Index — composed of the seven publicly traded dealer groups with operations focused on the U.S. market — was down 2.16 percent in August, while the S&P was down 0.12 percent.

This brings the year-to-date change in The KAR Index down 12.28 percent and off 30.37 percent from the market peak in June 2015.

Only two of The KAR Index companies were up in August, with Penske Automotive Group posting a 14.34-percent gain and CarMax a 1.17-percent gain. All others were down for the month, with AutoNation and Asbury Automotive Group leading the decline, each down more than 11 percent in August. Five of the companies posted a drop in same-store sales in the second quarter, with Penske not offering that data.

With sales growth stagnant, the public companies are focusing more on expense management and operational performance. 

Additionally, the public auto retailers have continued to improve F&I revenue per vehicle, with Sonic Automotive leading the way, posting a 5.7-percent increase over last year, to $1,342 per unit retailed. AutoNation, up 4.3 percent year over year, leads F&I revenue per vehicle at $1,602.

Jeff Schuster, senior vice president of forecasting at LMC Automotive, reported, “As we look at the remainder of the year, the industry faces an uphill struggle to match last year’s performance. With mixed economic signals, it certainly looks like U.S. auto sales may have peaked in 2015.”

Other significant industry data from the report:

— Average new retail transaction price, projected at $30,942, surpasses last August, $30,061.

— Total auto retail spend of $39.3 billion is the seventh-highest month on record.

— Incentive spend in August increased dramatically to $3,559 per vehicle versus $3,419 in August 2015, not far from the record of $3,753 set in December 2008.

— Truck share continues to increase, up to 59.6 percent.

— Leasing accounted for more than 31 percent of new car transactions in the first half of 2016, according to Experian Automotive. 

— Fleet sales increased to 3 percent year-over-year to 223,200 vehicles.

— The percentage of people who qualified for subprime auto loans, but are 60 days or more behind on payments reached 4.59 percent in July, a 17-percent increase from a year earlier, according to Fitch Ratings.  Delinquencies among prime auto loan borrowers also rose, but remain at a relatively low 0.4 percent, or 21 percent higher than a year ago.

Another record year? Perhaps not

After a record U.S. sales total in 2015, Kelley Blue Book’s full-year forecast for 2016 calls for sales in the 17.4 to 17.8 million SAAR range. 

During a monthly sales day call hosted by KBB and Autotrader, analyst Tim Fleming said KBB had forecast about 1.54 million units in August — down 2 percent from August 2015 — for a SAAR of about 17.3 million. “It doesn’t look like we’re going to hit that this month,” he said. “Sales are coming in a bit lower.”

Fleming said that with about 80 percent of August sales in, that target was looking to be off by about 5 percent, which would translate to about a SAAR of 16.7 million units.

While new-car sales growth is slowing, ATP is continuing to climb, rising 2.6 percent in August, Fleming said. reported that estimated ATP for light vehicles in the U.S. was $34,143 in August, up 2.3 percent year-over-year.

"However, incentives also have steadily climbed, and the ratio of incentive spend to average transaction price is at its highest point since 2009, at 9.3 percent.  As we near or pass the peak of new-car sales this year, each automaker will need to moderate production and incentive levels accordingly to maintain residual value strength moving forward."

During Thursday’s call, Fleming and Michelle Krebs, senior analyst for Autotrader, were asked if they thought 2016 could still surpass 2015’s record auto sales.

While they may have thought it was a possibility earlier in the year, they are less likely to think so now.

In part, it depends on the automakers.

“I think the biggest wildcard in how the year will end up will be how to automakers respond to some of the softness in the market,” said Krebs. “Will we see them pull out all the stops for incentives?

“If they do go for that record … it causes automakers to do unhealthy things. It causes them to allow inventories to build up, then to really beef up incentives. That has a very bad effect on residual values, and it certainly hurts profit margins.

“This will be the biggest test from the automakers in terms of a disciplined approach to inventory and incentives that they have promised to stick with,” she went on to say.

Fleming said he was pretty much undecided on the point before last month.

If I had to put rough numbers on it, maybe before this month I was close to 50-50,” he said.

“After seeing the numbers come in today, I’d say it’s less than 50. … I see that as a good thing. For the overall health of these brands, the residual values, it’s unnatural to hit records years after year.”


Used-car sales forecast for August

CARY, N.C. - 

TrueCar said in a forecast Tuesday that used-vehicle sales for August could beat year-ago figures by more than 2 percent.

The company is calling for a possible 3.30 million used-car sales this month, which would beat August 2015 by 2.3 percent.

Last week, also forecasted 3.3 million used-car sales for the month, down from 3.4 million in July. The resulting SAAR would be 39.0 million, versus 38.9 million last month.

These projections follow what Edmunds said what the best second quarter for used-car sales since 2007.

There were a combined 9.80 million used cars sold in April, May and June, up from 9.64 million in Q2 of 2015, according to the company’s Q2 2016 Used Vehicle Market Report.

Franchised dealers accounted for just over 3 million of this year’s Q2 used-car sales. This was a 4-percent year-over-year gain and the strongest Q2 ever for franchised used sales, Edmunds said in the report.

New-car sales

On the new-car side, TrueCar is calling for 1.54 million sales (including fleet), which would be 2.1 percent softer year-over-year.

The projected SAAR for August is 17.3 million, compared to 17.8 million in August 2015.

Taking fleet out, TrueCar forecasts 1.33 million new retail sales for August, which would be down 3.3 percent.  The company attributed this to softer consumer demand.

“Despite sales beginning to cool off, the industry is still on pace for a record year,” Eric Lyman, TrueCar’s chief industry analyst, said in a news release. “2015 delivered a 10-year high in August sales, so automakers faced a high hurdle to show year-over-year gains in August 2016.”

3.3 million used-car sales on tap this month

CARY, N.C. - is forecasting 3.3 million used-car sales for the month, down from 3.4 million in July. The resulting SAAR would be 39.0 million, versus 38.9 million last month.

These projections follow what Edmunds said what the best second quarter for used-car sales since 2007.

There were a combined 9.80 million used cars sold in April, May and June, up from 9.64 million in Q2 of 2015, according to the company’s Q2 2016 Used Vehicle Market Report.

Franchised dealers accounted for just over 3 million of this year’s Q2 used-car sales. This was a 4-percent year-over-year gain and the strongest Q2 ever for franchised used sales, Edmunds said in the report.

New-car sales forecast

Meanwhile, new-car retail sales are expected to decline year-over-year for fourth time in six months, according to a forecast from J.D. Power and LMC Automotive.

Their joint report calls for 1.27 million retail new-car sales in August, down 6.5 percent year-over-year, with total new sales down 5.2 percent at 1.49 million for the month.

Year-to-date, retail new-car sales are likely to finish August 1.2 percent behind where they were in the first eight months of 2015.  That said, total new-car sales through August are projected to beat year-ago figures by 0.5 percent.

John Humphrey, senior vice president of the global automotive practice at J.D. Power, said in a news release: “Following 66 consecutive months of retail sales growth that began in September 2010, we’ve seen four declines in the past six months, and this much of a pullback in August will be a disappointment for the industry.

“Softening retail sales amid low interest rates, relatively cheap gas and automakers pushing more aggressive incentives may be an indicator that further growth in this cycle will be difficult,” he said. “There is opportunity for some catch-up in the all-important Labor Day selling period, but as momentum slows, the industry will need to be cautious to balance volume and margin, as incentives are close to record levels.”

Jeff Schuster, senior vice president of forecasting at LMC Automotive, said it has become evident that last year was the peak for new-car sales.

“However, it is important to focus on the sustainable high level of demand,” Schuster said. “Peak does not mean doom and gloom, and while the industry faces risk, it is not destined for a pullback.”

Edmunds, meanwhile, is calling for 1.53 million total new-car sales this month, down 2.5 percent year-over-year. August's tally would represented an estimated SAAR of 17.2 million. 

However, the company is calling for year-to-date totals to reach 11.69 million, which would outpace year-ago figures by 0.8 percent. 

And 2015 was a record year .

“The summer isn’t delivering explosive sales like we saw last year, but the industry is still on pace to set an annual sales record,” Edmunds executive director of industry analysis Jessica Caldwell said in a news release.

“Automakers have done a good job this year of staying disciplined and managing their inventories” she said.  “With volumes at record highs, they can focus even more attention on battles for market share.” 

4 reasons to be upbeat about used market


Along with an analysis about how ongoing macroeconomic trends are pointing toward positive fortunes for dealerships, the team at KeyBanc Capital Markets attributed an upbeat conversation with Cox Automotive chief economist Tom Webb coupled with the July findings of its monthly dealer survey for producing such a “bullish” outlook.

Before delving into the takeaways from the chat with Webb, 60 percent of dealers surveyed told KeyBanc they posted a year-over-year used-vehicle sales increase in July. And 40 percent of the participants indicated that climb was more than 10 percent.

KeyBanc reported dealers generated those increases “despite the near-term headwind of grounded inventory under recall, and growth should accelerate as recalled parts are expected to come into service departments in the back half of the year.”

Furthermore, financing to turn used metal is on sure footing, too, as all of KeyBanc’s July dealer survey participants mentioned intact or increasing subprime and overall auto financing availability.

Those upbeat survey findings arrived in tandem with KeyBanc’s one-hour teleconference with Webb where analysts and the wholesale expert who is coming back again to the National Remarketing Conference at Used Car Week discussed used-vehicle pricing and demand in detail.

Webb reiterated many points he’s mentioned in previous reports from Auto Remarketing, stating that used-vehicle pricing is strong even as the supply of off-lease vehicles has been growing at 20 percent for the past couple of years, which reflects strong consumer demand.

“He believes, and we share this view, that used vehicle pricing outlook remains solid even as the off-lease volume continues to come in at about 16 percent annual growth through 2018,” KeyBanc analysts said.

“Better equipped, safer cars cost more when new and therefore they cost more when used,” they continued. “Increasing supply is a headwind, but Tom believes in this environment of strong demand and financing availability, it is an immaterial headwind, perhaps a 2-percent decline in prices, which is insignificant to demand or profitability."

Both Webb and KeyBanc noted increasing off-lease supply is good for both the new and used sales outlook.

“It supports new vehicle demand as a majority of lessees (about 80 percent to 85 percent) who turn in expired leases will leave the lot with a new vehicle lease,” KeyBanc said. “It supports used vehicle demand as it improves inventory availability.”

Additionally, KeyBanc published a new analysis of historical U.S. GDP growth, unemployment and U.S. light vehicle seasonally adjusted annual rate (SAAR). The firm noted that its analysis confirmed positive outlook for vehicle demand and dealers based on belief that:

—There is an apparent disconnect between auto stocks and the S&P 500 as, year-to-date, the S&P 500 reflects a positive investor sentiment on the U.S. economic outlook, but the same is not being reflected in the auto stocks.

—The U.S. economic forecast remains positive, in the 1 percent to 2 percent compound annual growth rate range in 2016 and 2017, and is expected to accelerate from weaker first-half growth, largely driven by consumer spending and the high-single-digit growth outlook in the housing market.

—Initial unemployment claims remain on an improving trend and the outlook remains positive, driven by a positive economic growth outlook, as there is a strong reverse correlation between them.

“If good economic outlook equals good labor markets equals good automotive demand, then good economic outlook equals good automotive demand,” analysts said.

3.4 million used-car sales likely for July

CARY, N.C. - 

Look for used-car sales to finish July near the 3.4 million mark, as forecasts from and TrueCar each landed in that neighborhood.

Edmunds estimates July’s used-car sales tally at 3.4 million, resulting in a 38.7 million SAAR. Last month, there were 3.2 million used-car sales, with a resulting SAAR of 38.7 million, the company said.

TrueCar projected a possible total of 3,441,581 used sales this month, which would beat year-ago figures by 4 percent.

Citing data from the National Automobile Dealers Association, ADESA chief economist Tom Kontos said in a report earlier this month that franchised dealers lifted June used-car sales by 5.3 percent year-over-year.

Independents were up 9.1 percent, he said. 

Beige Book: Dealers navigating various sales headwinds


The latest Beige Book — the Federal Reserve’s ongoing effort to gather anecdotal information on current economic conditions through reports from bank and branch directors and interviews with key business contacts, economists, market experts and other sources — showed pockets of dealership turbulence in several of the 12 districts.

While contacts in Cleveland, Kansas City and Dallas expressed an optimistic outlook for future vehicle sales, most districts noted that auto sales slowed during the reporting period, but remained at fairly high levels.

All but the First District in Boston discussed the auto industry in the latest Beige Book that Fed officials released on Wednesday. Many assessments not only touched on what happened as the second quarter closed but also delved into future expectations, since the Fed won’t offer its next Beige Book until after Labor Day.

Here’s the rundown of auto-industry content shared in the newest Beige Book:

New York

The Fed indicated that new-vehicle sales are reported to have softened somewhat in May and June, though they are still said to be at fairly high levels. Officials mentioned inventories of new vehicles are reported to be mixed, largely reflecting availability of financing incentives on some models but not others.

The report also acknowledged the used-vehicle market remains soft, with both sales activity and prices drifting down in recent months. Officials pointed out that retail and wholesale credit conditions generally remain favorable.


Overall, Third District dealers told the Fed that vehicle sales slowed further during the current period but remain at high levels.

Officials added that more precise early period reports indicated sales were lower than during the same time last year.

“Anecdotal reports for recent weeks suggest sales will be flat, at best, with last year,” the Fed said. “Dealers are content with the relatively high sales numbers; however, they spoke of ‘managing the plateau’ and of caution against overextending their businesses financially.

Dealers in this district still see growth potential in 2017, according to the Beige Book.


Year-to-date new-vehicle sales through May came in on par with those of a year ago, according to dealers in the Fourth District.

The Fed found that automaker incentives continue to rise and are now reportedly above 10 percent, but average transaction prices are also rising because of the ongoing shift in consumer preferences from cars to light trucks (including SUVs).

“New-vehicle unit volume is expected to remain at high levels this year, though dealers anticipate retail transactions to decline and fleet sales to rise,” officials said.

And now some good news for the used departments at dealerships in the district:

“Consumers are seeing increasing value in the purchase of used cars,” officials said. “The large number of leased vehicles being turned in is putting downward pressure on their resale prices. Year-to-date sales of used vehicles rose almost 5 percent compared to those of a year ago.”

The Fed added that dealer payrolls increased along seasonal trends.


The Fed found that vehicle sales varied by location.

“A dealership in western Virginia reported that a recent increase in their digital footprint has helped push up foot traffic and sales, and an executive at a dealership just outside of Washington, D.C. said that sales have been stronger since our previous report,” officials said.

“Dealerships in central North Carolina and the Hampton Roads region of Virginia reported that sales remained steady at previous levels,” they continued. “Sales of heavy trucks declined, according to a dealer who also noted that higher prices caused by changes in engine emissions requirements in the next model year could weaken future sales.”


Heading deeper into the South, dealers reported some slowing in the pace of sales in May.

“Merchants expect sales to remain relatively flat over the next few months,” the Fed said.


Purchases of new and used vehicles continued to be “robust, and leasing activity remained “strong,” according to the Beige Book recap of the Seventh District.

Officials noticed average vehicle transaction prices again moved higher as the mix of sales continued to shift toward larger, more expensive vehicles and because of greater demand for high-tech options.

St. Louis

Dealers in eastern Arkansas reported that sales continue to be favorable compared with 2015.

“Multiple dealers noted that they expect an increase in year-over-year sales in the third quarter,” the Fed said.


As energy prices soften, dealers in the Ninth District are seeing the impact.

“Sales of new vehicles at a dealership in Rapid City, S.D., were off by 50 percent and used-vehicle sales were off by 30 percent since January due to layoffs in Wyoming coal mines and oil fields in North Dakota,” officials said.

Kansas City

The Beige Book indicated sales were flat and remained below year-ago levels.

“But dealer contacts expected a moderate pick-up in the coming months,” the Fed said. “Auto inventories decreased and were expected to fall further.”


The Fed found that sales in this district held steady and were in line with year-ago levels.

“Sales are projected to be strong in 2016, but contacts expressed concern about the potential negative impact of the election on consumer confidence,” officials said.

San Francisco

And finally out West, officials recapped that vehicle sales eased somewhat, “and contacts noted that some dealers were selling new vehicles at a loss to meet sales quotas set by manufacturers.”

3.24 million used-car sales on tap this month

CARY, N.C. - 

Look for June to be a strong month for the retail used-car market.

According to TrueCar, there may be more than 3.24 million used-vehicle sales this month, which would beat June 2015 figures by 5.5 percent.

Those numbers in TrueCar’s forecast include franchised and independent dealers and sales between private parties.

In the first five months of the year, franchised dealers sold approximately 5.3 million used vehicles and independents moved nearly 5 million used units, according to NADA figures cited by ADESA chief economist Tom Kontos.

During an AIADA webinar on Tuesday, Kontos said each of those figures represents a year-over-year percentage increase in the low- to mid-single digits.

“So, that’s healthy,” Kontos said.

He brought up what’s called Say’s law, in that supply of something can generate demand. It wasn’t applied to the used-car business, he said, but it makes sense here.

“Basically, the supply of used cars is generating used-car sales simply because the availability is recovering, so people have more choices out there,” Kontos said. “And the tendency now will be for dealers, I think, to be more aggressive with their pricing because they’re able to get the cars a little bit cheaper at auction, as the supply grows.

“They have a little more selection, so they can optimize their purchases to be right for their market, and then consumers get a little bit of a (benefit) there too from a little bit more ability to negotiate on price,” he said.