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New and used cars have continued to reach new highs as Americans begin to drive more and semiconductor chips remain in short supply because of COVID-19 restrictions in the countries that make them.
The supply issues led GM on Thursday to announce it has cut production at three plants making full-size pickup trucks for one week.
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GM will idle its plants in Ft. Wayne, Ind., and Silao, Mexico, next week, and its plant in Flint, Mich., will run one shift, instead of three. Those plants make its Chevrolet Silverado 1500, GMC Sierra 1500, Chevrolet Silverado HD, GMC Sierra HD and Cheyenne trucks.
Meanwhile, Cox Automotive reported Thursday that used car prices set another record.
The average list price for used vehicles was $25,101 at the end of June, up 26% from the end of June 2020 and up 29% from June 2019. The price was $24,414 at the end of May and $20,000 at the end of June 2020.
New car prices also set records. The average price for all new cars in June was $42,258, up 2.2% from May and up 6.4% from June 2020. The average price of a new full-size pickup was $57,267 in June, up 1.8% from May and up 8.7% from June 2020. The only new car prices that have been falling are for electric vehicles. The average one cost $49,766 in June, down 5.6% from May and down 13.4% from June 2020.
Charlie Chesbrough, senior economist at Cox Automotive, said one bright spot for used car buyers was that inventories were improving last month.
Dealers had 2.45 million unsold cars and trucks on their lots at the start of July, up from 2.38 million a month earlier. Used-vehicle inventory was 6% above the same time in 2020 but 11% below 2019.
"While new-vehicle inventory continues to drop, the used-vehicle market is showing small signs of improvement, with slower sales allowing inventories to creep upward," Chesbrough said. "With wholesale prices of used vehicles beginning to retreat from record highs, the worst of the supply crunch in the used market may be behind us."
The days' supply for used vehicles has been on an upward trend since early April when used-vehicle sales peaked and then began to slow. By the end of June, the sales pace was running 13% below 2020 and 3% below 2019 levels.
PenFed reported this week that its originations of loans for new and used cars was about $1 billion in the second quarter, double the volumes for the second quarters of the previous two years.
CUNA estimated that credit unions held $143 billion in new car loans May 31, down 1.3% from a year earlier, but with a notable gain of 0.8% from April to May, their best month-to-month gain since May 2020, when they grew 1.1%.
The used car balance at credit unions was $249.7 billion May 31, up 7.1% from a year earlier and up 1.3% from April to May, the best month-to-month gain since May 2018.
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Jim DuPlessis
Jim covers economic data trends emerging for credit unions, as well as branch news and dividends.
