Market indicators are certainly trending up these days for retail automotive dealers. According to J.D. Power and LMC Automotive, new-vehicle retail sales for May 2021 are expected to be the highest ever recorded for the month of May. Total new-vehicle sales for May 2021, including retail and non-retail transactions, are projected to reach 1,555,600 units, a 39.6% increase from May 2020. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.7 million units, up 4.7 million units from 2020.
Rising costs do not seem to be impacting consumers yet. While labor and inflationary concerns are capturing headlines and many people are just beginning to emerge from their pandemic bunkers, consumers are on track to spend $53.1 billion on new vehicles in May, the highest on record for any month. Total retailer profit per unit, inclusive of grosses and finance & insurance income, are on pace to reach an all-time high of $3,245, an increase of $1,678 from a year ago and the first time above $3,000 on record. Coupled with the strong retail sales pace, total aggregate retailer profits from new-vehicle sales will be $4.5 billion, the highest ever for the month of May and up an astounding 162% from May 2019.
The used vehicle market is also showing record numbers, with average trade-in values rising to $6,201, an increase of $3,229 (up 108.7 percent) from a year ago. According to the Manheim Used Vehicle Value Index, April delivered three straight months of records as wholesale car prices came in at 194.0, which beat year-ago figures by 54.3 percent and was nearly a 15-point jump from the prior record set a month before (179.2). The value for pick-up trucks alone jumped 77.9 percent!