The latest dealer survey from KeyBanc Capital Markets highlighted that an overwhelming majority of participants see used vehicles rolling over the curb at a healthy clip and service drives steady with activity.
Analysts explained that survey responses indicated a second consecutive month of used-vehicle sales volume increases in October as 76 percent of respondents reported various levels of year-over-year growth, continuing September’s strong trend when 86 percent of respondents reported an increase.
Meanwhile, KeyBanc reported that parts and service revenue growth trends appear strong for the second consecutive month as 88 percent responding dealers said they enjoyed growth through the service drive in October. Like used sales, this P&S trend continued from September’s positive reading that had 71 percent of participating dealers enjoying growth in this store department.
In other parts of KeyBanc’s latest survey, analysts found that dealers split almost evenly with regard to their gross profit per unit on used-vehicle sales with nearly an equal amount seeing a $50 year-over-year rise in October while the remainder sustained a dip by that figure on a comparative basis.
However, the F&I department continues to enjoy solid performances for participating dealers, which included 88 percent that noted gross profit per unit improved in October; some by more than $50 per delivery.
As dealers continue to wage the battle for gross in the used department, the KeyBanc survey detailed how the challenge is continuing on the new-car side, too, with 56 percent of respondents saying gross on new models dipped by $50 per unit in October.
Finally when it comes to financing, the dealer survey results mirrored findings from the latest data from TransUnion as 53 percent of participants reported tightening availability, especially when it comes to subprime.
“Going forward, we expect default rates to remain well below pre-recession levels and automotive financing availability to remain stable,” KeyBanc said.