Peter Boockvar

Rising Car Prices Spur New‑Used Gap, Boosting Used Market

Interesting commentary from Sonic Automotive on their call and the affordability issues that are still here and possibly about to rise again: “And look, January was a hell of a month. Without the snowstorms, it would have been a magnificent month. So we’ll see, I don’t know if it’s the tax stuff that’s helping that, but definitely prices are higher and so maybe there’s some great elasticity, but it does bring in the affordability discussion, and it really rings a bell from a used car perspective. We’re going to have that gap that we’ve been missing between new car and pre-owned cars again, and that’s just going to be fantastic for the industry and really, really good for EchoPark (their used car division).” More on price. “I am cautioning and concerned about what is going to happen, how far, how much elasticity can we deal with or can the consumer deal with from a new car perspective? And something is going to happen and that the prices are just getting too high. And it didn’t show up in January. It’s really not showing up in February. We’ll see. I think a lot people are counting on big tax returns. We’ll learn a lot this summer.”