BANDON, Ore. -

Days’ supply of used vehicles appears to be on the verge of declining sequentially for the fourth straight month, according to CNW Research. And if it falls any further, used prices may see “significant” hikes across the board, the firm said.

CNW estimated July’s days’ supply of used units to be at 46.02. That’s down only slightly from 46.18 in June, but off more than 11 percent from where the industry stood in March of this year.

“After peaking in March of this year, July’s days’ supply of used models has continued to decline and now stands at 46 days,” said CNW president Art Spinella in the latest Retail Automotive Summary.

“With demand high, that’s about as low as supply can go without causing some significant price increases across all three channels,” he added, referring to franchised dealers, independent dealeres and private parties.

The supply forecast for July is down from days’ supply of 47.51 in July 2012. June was flat year-over-year.

Interestingly enough, in each of the first five months of 2013, days’ supply increased year-over-year, according to CNW.

In fact, after a string of 17 consecutive months of year-over-year declines in used days’ supply that began in January 2011, the used market rattled off 12 straight months of days’ supply increase before that streak ended last month.

To learn more about current trends in used-vehicle supply, be sure to check out the Power Supply story in the Power 250 special section of the Aug. 1-14 print and digital editions of Auto Remarketing.

More on Used Prices

Going back to Spinella’s point on used-car prices, you can probably expect to see changes in retail pricing across all three channels soon.

“Even as July’s retail sales climb, used prices continue to be squeezed. But the trend will likely end by fall,” Spinella noted.

“In the opening weeks of July, used-car asking prices from franchised new-car dealers fell 4.7 percent with actual transaction prices slipping 1.6 percent,” he continued. “Customers are willing to pay a higher share of the asking price — 95.2 percent versus a 12-month low of 92.02 percent registered in August of last year.”

For independents — whose inventory mix has improved, Spinella said — asking prices have climbed 2.63 percent year-over-year in July and transaction prices were up 6.53 percent.

 

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.