Tax Season Produces Lower-Than-Expected Used Car Sales

Tax Season Produces Lower-Than-Expected Used Car Sales

Tax refund season typically means more disposable income lining the pockets of car shoppers. Year after year, the extra influx of cash helps consumers feel confident about purchasing a vehicle, new or used. However, this year was different. Used auto dealers did not see the sales numbers they are accustomed to this time around. While there are several contributing factors to take into consideration, including fuel prices, the ongoing war, rising interest rates and higher inflation… retailers like the national powerhouse CarMax speculate there are several reasons leading to the dip in sales.

According to the company's Q4 earnings call from April 12th, market forces are starting to change and directly impact consumer demand. "Total unit sales in the fourth quarter declined 5.2%, and used unit comps were down 6.5% versus the fourth quarter last year," said Bill Nash, President and CEO of CarMax, Inc. "We believe several macro factors weighed on marketwide used car sales including consumer confidence, vehicle affordability, the omicron COVID surge, and lapping stimulus benefits paid in the prior-year period." Another side effect of this unpredictable market has been less trade ins, longer leases and more financing on older vehicles thus contributing to a slowdown for used car purchases. This slowdown and the lack of new vehicle inventory thanks to the ongoing chip crisis has created a trickle-down effect leading to price hikes on used models. 

Ultimately, FVL suppliers are in a precarious position entering summer 2022 because the market is no longer able to bear the costs of shifting inventory across the country, inventory mix and sourcing will be integral to success and logistics will be a key differentiator. While there are plenty more issues to consider, what is most important are finding the solutions to alleviate the current supply chain pressures and market fluctuations.

RPM is one of the fastest-growing logistics companies in the North America and Europe, specializing in Finished Vehicle and Freight transportation. Our knowledge, technology, and manpower can reduce customer lead time, move cars faster for reconditioning purposes, and find transit routes to get inventory flowing to the markets that will return the most on your investment. Leveraging a robust network, we deliver thousands of units per month and address our customers’ shipping needs by matching available capacity using our own proprietary technology tools and software. With our continued global expansion into new markets, we have expanded our 3PL solution-driven service offerings to include capacity planning, information technology, strategic planning, and inventory management. For more information on what our dedicated FVL division can do, visit RPMmoves.com.

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