Pandemic variants, supply chain challenges and economic volatility have created a warped market for new and used vehicles and will continue to disrupt the automotive sector for the foreseeable future, according to a recent analysis from J.D.
Looking back on 2021, we saw used-vehicle retail markets experience an 18 percent price increase while wholesale prices rose by a whopping 41 percent from 2020 levels as auction sales dropped by an unsettling 13 percent.
Managing volatility is the new name of the game.
As dealers reap steep returns per used vehicle, the out-of-pocket spend by consumers remained strong in 2021, largely buoyed by government stimulus payments and elevated trade-in equity.
Retention rates will slide to 68 percent by the end of 2022 and land at a still-outstanding 59 percent rate through 2023.