Strong used car sales, a sign of an improving economy and good news for CarMax
As someone who works in the industry and follows it closely, I've never been a big fan of any auto stocks, neither manufacturers nor retailers. I'm still not, but the following news item that I came across today is good news for auto groups that have large used vehicle operations, like CarMax (KMX) the country's largest used vehicle retailer.
NADA Used Car Guide Making Unprecedented Value Adjustments in View of Long-Term Market
After months and months of consecutive year-over-year declines, used sales have finally begun to improve. In July, the latest month that statistics are available for (used vehicle sales figures are much less accurate and timely than new vehicle sales numbers which are reported monthly by automakers), used vehicle retail unit sales posted their third consecutive year-over-year increase.
Used vehicle prices are improving as well. According to NADA Used Car Guide, during the first week of September used vehicle auction prices were stronger than in August. Specifically, the auction prices of cars, SUVs, and vans rose by around 1.5% month-over-month. Pickup prices rose a little over 1% month over month.
As a result, the widely followed NADA used vehicle guide is "making unprecedented adjustments in select vehicle segments in response to what we believe to be a long-term repositioning of wholesale and retail market prices."
The drop in the price of gas since the spike last summer has caused the value of used SUVs and pickup trucks to soar by 30% year-over-year.