THE CAR MARKET JUST SHIFTED — 5 MAJOR SOURCES REVEAL WHAT’S REALLY HAPPENING

Five major car market sources reveal what's really happening right now. Everybody has an opinion about the car market. Dealers have one. Buyers have one. YouTubers certainly have one. But today, Elizabeth and I aren't particularly interested in anybody's opinion. We just want the data. So we want to share five of our go-to automotive data sources in America. They start with Black Book, Mannheim and Cox Automotive, CarGurus, IC Cars, and JD Power. And we've researched all five of them with the same basic question. What is actually happening to the car market right now? Because when you put their numbers together, something very interesting starts to appear. Wholesale prices are weakening. Retail used car asking prices have started moving lower. But that doesn't mean cars are suddenly cheap. New car prices remain painfully high. The average financed new car payment has climbed to more than $800 a month. Remember when it was $700 a month? That was crazy. Now it's become more insane. 800 bucks a month. Manufacturers are increasing incentives. Nearly three out of every 10 trade-ins are coming into dealerships with negative equity. Say thank you to all those dealers who are selling cars way over MSRP during the pandemic and gouging customers. And one corner of the used car market is doing something completely different. Used EV prices are actually rising. So Liz, let's forget the headlines. Let's follow the money. Well, first up, one of our favorite resources, Blackbook. And they are showing wholesale prices are softening. Blackbook's report showed the overall wholesale market falling 0.48 percent in a single week, following a 0.51 percent decline the previous week. That's a whole percent in two weeks, by the way. Cars declined 0.39 percent, while trucks and SUVs dropped 0.51 percent. Their estimated used retail days to turn was roughly 34 days. What that means for the car market is, first, dealers are paying less at auction. Wholesale is essentially the dealer-to- dealer auction side of the used car market. When wholesale values decline, dealers generally don't have to bid as aggressively to acquire replacement inventory. Number two, that can eventually pull the retail prices down, too. Retail prices don't move instantly with wholesale. A dealer may still have $27,000 invested in a vehicle it bought weeks ago, even though an equivalent vehicle might bring only $25,500 at the auction today. But sustained wholesale declines eventually pressure these dealers to adjust retail prices. Number three, aging inventory becomes more painful. This is especially important for buyers. Imagine a dealer has a used SUV that's been sitting for, say, 70 days. If wholesale values have been falling while that vehicle sits there, the dealer isn't merely holding an old piece of inventory. It's potentially holding a depreciating asset. Now that's negotiating leverage for you. Number four, trucks and SUVs deserve particular attention. Black Book reported trucks and SUVs dropping 0.51 percent, and every one of the 13 two- to eight-year-old truck segments declined that week. Full-size pickups fell 0.74 percent in one week and had declined for 11 consecutive weeks. Number five, the 34-day turnaround tells us demand wasn't dead. This is an important qualifier for the show. Black Book reported roughly 34 days to turn, while auction conversion remained at 57 percent. It characterized auction activity as stable, with buyers still participating but becoming more selective. So I think the strongest interpretation is this. The used car market isn't crashing, but wholesale prices are softening, and that's important because wholesale tends to show us where dealer inventory values are heading. If those declines continue, dealers that are sitting on aging used inventory could find themselves owning cars that are worth less every week that they don't sell them, and that can eventually translate into lower retail prices and better negotiating opportunities for car buyers. Then there's Mannheim Cox, but used values aren't collapsing. Cox's Mannheim index was down 0.6 percent. That's an important distinction because prices can be falling right now while still remaining above last year's level. Wholesale supply had also risen to about 28 days. Mannheim is confirming what Black Book is seeing as well. Used vehicle wholesale prices are starting to lose some momentum, but don't confuse that with the crash. Values are still two percent higher than they were a year ago. What we're seeing looks like a market that's gradually normalizing, and with wholesale supply increasing at the same time prices are softening, the balance may be starting to shift slowly back towards the buyer. Now CarGurus says watch what's happening on dealer lots. Its current pricing index shows used asking prices down 0.5 percent over the last month. That's retail asking price data from millions of used listings, not auction data, which gives us a nice wholesale versus retail comparison. What does CarGurus tell us? Dealers have started lowering asking prices but only modestly. That's important because Black Book and Mannheim are primarily telling us what's happening upstream at wholesale. CarGurus lets us see whether that weakness is making its way onto the window stickers consumers actually encounter. And right now the answer appears to be yes, but slowly. Wholesale values have been softening more noticeably while dealer asking prices are barely moving. That's exactly what we'd expect. Dealers don't immediately reprice every vehicle because auction values fell last week. They'll try to preserve their gross profit for as long as the market allows. But if wholesale prices continue falling, dealers acquire replacement vehicles more cheaply, and existing inventory keeps aging, that pressure can eventually work its way to retail pricing. There's another useful lesson in the CarGurus number. This is not happening equally across all vehicles. For example, the Ford Expedition is down about 3.7 percent over the last 30 days, while some makes and models are actually increasing. So this is a good takeaway. CarGurus shows us that the weakness we're seeing at wholesale is beginning to show up on dealer lots, but it hasn't worked its way through yet for everything. Dealer asking prices are edging lower, not plunging, and that tells me that we're not looking at a used car market crash, but looking at a market where pricing power may be gradually shifting away from sellers and back to the buyers. Now let's move on to IC cars, and what does it tell us? There's an EV surprise out there. Their study of more than 1.8 million one- to five-year-old vehicles found overall used prices down 1.3 percent year over year, while used EV prices were up 7.4 percent. The average used EV reached $33,305, and IC cars ties much of that rebound to higher gasoline costs. What does IC cars tell us? The overall used market is getting cheaper. The average one-to-five-year-old used vehicle was $32,395, down 1.3 percent year over year. In fact, used prices were down year over year during five of the first six months of 2026, and flat during the last couple months. That reinforces the broader story we're getting from BlackBook, Mannheim, and CarGurus. The overall used market is softening, but EVs completely bucked that trend. Used EV prices went from being down 3.4 percent year over year in March to plus 2.7 percent in April, plus 5.2 percent in May, and plus 7.4 percent in June. That's a dramatic reversal in only three months. The average one-to-five-year-old EV reached $33,305, $2,300 more than a year earlier. And IC cars connects that reversal to higher gasoline prices, changing consumer behavior. The research found gasoline costs rose sharply earlier in 2026, making the operating cost advantage of EVs more noticeable. But here's the really interesting lesson. This isn't one used car market. That's what we need to emphasize here. You can truthfully say used car prices are declining while simultaneously having certain segments where prices are actually rising rapidly because demand has shifted. Tesla plays a big role in this. It illustrates all of this beautifully. In fact, used prices were up Model X plus 17.5 percent, Model 3 plus 13.5 percent, Model S plus 13.1 percent, and Model Y plus 12 percent. All four Teslas landed among the 10 used vehicles with the largest year-over-year price increases in IC cars study. So, I think our lesson is this. IC cars teaches us something really important. There isn't one used car market. Overall used prices were down 1.3 percent, but used EV prices were up 7.4 percent. Why? Consumer demand can shift very quickly. As gasoline became more expensive, EVs became more attractive to some buyers. So, when someone tells you the used car market is down, that doesn't necessarily mean the vehicle you want is down. You have to look at the segment and ultimately the specific make and model you're actually shopping for. And last but not least is J.D. Power's information. J.D. Power's forecast puts the average new car transaction price at $45,369. That's up 1.2 percent year-over-year. Average incentives reached about $3,451, up 8.1 percent. The average new car financing rate eased to 6.54 percent, yet the average monthly payment still climbed to a record $808. And 29.4 percent of trade-ins carried negative equity. That's a lot. Meanwhile, 13.8 percent of new car loans stretched out to 84 months or even longer. The car market may be getting more competitive, but that doesn't mean cars are becoming more affordable. That's a very important distinction for all of you out there. The average transaction price rose to $45,369, up 1.2 percent. At the same time, manufacturers increased incentives to $3,451 per vehicle, up 8 percent. That tells us manufacturers are trying to work harder to keep buyers buying. They're offering more discounts, but vehicle prices remain high enough that those incentives aren't solving the affordability problem. Then financing tells us an even stronger story. Interest rates actually improved to 6.54 percent, the lowest level since 2022, yet the average payment still hit a July record of $808. That's huge. While rates are coming down, incentives are going up, and the payment is still breaking records. Why is that? Vehicle prices remain high, and buyers are bringing less equity into their purchase. And that 29.4 percent negative equity number might be one of the most important statistics in this entire market report. Nearly three out of ten trade-ins has negative equity. J.D. Power specifically connects this to people who bought vehicles several years ago when inventory was scarce and prices were near their peaks. And now they're coming back to trade and discovering they owe more than their vehicle is worth. That negative equity frequently gets rolled into the next loan. And how are consumers trying to make all this fit in their budgets? Longer loans. Ouch. J.D. Power says 13.8 percent of new car loans are now 84 months or longer, up two percentage points from last year. That gives us a powerful conclusion. So are we finally in a buyer's market? Not exactly, but we're getting something buyers haven't had enough of for the last several years. That's leverage. Wholesale prices are softening. Retail asking prices are beginning to respond. Incentive spending is increasing, and manufacturers still need to sell vehicles. But affordability remains terrible. That's why the buyer who walks into a dealership and simply asks, what can you get my payment to, can still get absolutely slaughtered because a lower payment doesn't necessarily mean a cheaper car. It could mean a longer loan, more money down, more negative equity rolled forward, or simply moving numbers around until the payment looks comfortable. The market is giving buyers more negotiating opportunity, but you still have to know how to use it. I'm Kevin Hunter here with Amazing Elizabeth. You guys rock. God bless you all.