Podcast: Used-EV market ramps up as tax credit end looms 

Amanda Harris 0:19 Hello everyone and welcome to the road map from auto Finance News. Since 1996, the nation’s leading newsletter and automotive lending and leasing. It is Monday, June 30th and I’m Amanda Harris. First, I’d like to thank our sponsor for this week’s podcast data Scan now.
Last week we dived into the EV landscape, powersports sales and more.
So for now, I’ll turn it over to truth and Aidan to share their top takeaways from last week.
Truth, once you start us off. Truth Headlam 0:44 Thanks, Amanda. Ucvs Day supply dropped 11% year over year in May. And it was also down 3% month over month. So that actually marked the lowest our tightest inventory level since June 2022. So day supply sat at about 40 days. And this was due to demand. So this was due to consumer demand, according to Stephanie Valdez Treaty, who is the Director of Industry Insights at Cox Auto? She also said that Ucvs are a good option for people who are looking for a vehicle with a low monthly payment. And as you might have guessed, usually these sales surge. In May, and were up 32% compared with last year. Newbies, however, did not have as good of a month in terms of sales. Sales dropped 10 percent 10.7% year over year in May, as inventories rose 8% month over month. However, year over year inventory was also down for new Ev’s. On a slightly separate but related note. No. Remember used E vs has increased so much in the second quarter that Cox Auto is projecting a surplus of 100,000 units to be sold, which will be a record for all quarters, Stephanie said. So we won’t know if used Ev’s hit that record until sometime during the first two weeks of July. But it definitely is something to watch out for now for an update on Powersports, I’ll turn it over to Aidan. Aidan Bush 2:31 Thank you. Truth. I think it’s really interesting, sort of the kind of new and used vehicle inventory and sales in the powersports market kind of mirrors what you saw in the EV space. So a few weeks ago, listeners may remember us talking about this persistent consumer demand in the used powersports market. And that’s something we’re continuing to see with month over month value increases for both motorhomes and towables in May. And we actually last week kind of did an episode really diving into the used powersports market. So if you’re interested, you can check that out. Out. But it’s been a little bit different for new vehicle purchases. Namely your Atv’s side by sides and other off road vehicles have seen heavy promotions, rate buy downs and rebates compared to this time last year, mainly in an attempt by manufacturers to cut down existing inventory and get through their sort of current model year product lineup we. Also seeing this in marine and RV. So I spoke with Sean Gatesy, the director of sales for Scarab jetboats. Their marine manufacturer and he said that these aggressive incentives could be cutting into OEM profits. Similarly, he said that the past months for marine have been defined by kind of many marine segment sales dipping double digits in some instances. He said some causes for that were a mix of poor weather in the Midwest and then that broader kind of tariff induced market UN. We’ve been talking about for what feels like months now. Some other kind of interesting scattered data points. Looking at the used powersports market, there’s this organization known as the Marine Retailers Association of the Americas. They issue this monthly survey to around 80 or so marine dealers, their most recent April survey found that a majority of people who were surveyed said inventory is too high and that they had retail sales declined. Sales declines rather zooming out kind of from the marine lens, the powersports market as a whole has been showing sort of mixed messages in terms of its health. So we saw capital market investments briefly slow down in April and we heard from Octane and Thunder Rd. financial to lenders about that. But we’ve also seen sort of resiliency in the past few months following that April slowdown on top of that, there’s been investment groups pouring mill. Into brands like Arctic Cat and KTM, I believe Arctic Cat already has its model year 2026. Lineup announced and these are are both kind of brands that were previously on the brink of bankruptcy. Or internal restructuring. So there’s kind of two ways you can take that information with both capital markets slowing down, but then also this kind of newfound investment in some sort of legacy power sports brands. But that’s all for me, so I will pass it over to Amanda for the rest. Amanda Harris 5:14 Great. Thank you, Aidan. And truth, of course, turning to some economic news, recurring applications for US unemployment benefits rose to the highest since November 2021, with the number of continuing claims at almost 2 million as the week ended June 14th. And as according to Labor Department data, initial claims fell. To 236,000 in the week ended June 21st. An Automotive News Japan has indicated that the country, whose automakers make roughly 3.3 million cars in the US. Annually cannot accept U s s 25% tariff on vehicles. By comparison, Japan ships just 1.37 million vehicles to the US per year. Toyota also posted 1/3 consecutive monthly record in sales in May, even as automakers are braced for losses related to the tariffs. Toyota’s global sales rose 8% year over year to nearly 960,000 vehicles. With Toyota and Lexus brand sales up 11% in North America. As part of a normal price revision process, Toyota will increase prices on some cars sold in the US by $200.00 and have assured everyone this is not tariff related. It is part of a normal revision of prices. Toyota also saw rise in certified pre owned vehicle sales in May alongside an industry wide uptick. CPO sales increased about 2.4% year over year during the month to just over 231,000 units. Sales of Toyota certified used vehicles were up 4%. Year over year in May to more than 30,000 units, and that followed a 25% year over year jump in both March and April. While sales are strong, a reduction in off lease vehicles coming back to market has more consumers purchased their leases at the end. Is contributing to supply challenges that will likely keep sales lower than they could be this year. In auto finance news, automakers are keeping a close eye on credit performance as federal student loan payments and credit agency reporting resume, the payments could weigh on consumers and lead to higher delinquencies and losses in the months to come across securitized auto loans, delinquencies and annualized net loss. Climbed year over year for both prime and nonprime loans, but remain largely stable compared with loans originated in 22 and 2023 tariffs and student debt have not yet had a material impact on performance, but are likely to be headwinds later this year on a somewhat related note, bankruptcy filings also rose 13% year over year at the end of March, which poses a market share opportunity for. Subprime lenders who lend to consumers in active bankruptcy fin be USA, for one, has seen a rise in the percentage of loans tied to consumers and bankruptcy so far this year, compared with 2024 originations. Thank you again for data scan for sponsoring this episode. Their new risk. A solution allows financers to tap real time analytics and avoid missing red flags between audits. And as always, thank you for joining us on the road map and be sure to follow with an X in LinkedIn and we will see you online at auto Finance News net and here next time.