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Used car prices fell for the second month in a row according to the April inflation print from the Bureau of Labor Statistics, known in your hood as the BLS. Prices are down half a percent in April, but still were up 1 and a half percent from a year ago. Meanwhile, new vehicle prices, they were flat last month, but rose slightly on a year-over-year basis. Here with more we've got Greg Migliore, who is the editorial director at AutoGuide. Greg, just take us into your reaction from the print first and then we'll get into some of the other, uh, of course, major drivers of what's taking place broadly here within the mindset of consumers.

Sure, Brad. Well, thanks for having me. Good to see you. I mean, right now, the car business is still trying to sort out the impact of the tariffs, and I think that was evident in the better than expected CPI numbers and some other numbers you mentioned. We haven't seen a dramatic immediate effect on pricing due to tariffs. Uh, I think there just really wasn't enough time to feel the impact. But we are seeing these tariffs hit in other ways. So we're starting to see fallout as companies like Honda and Nissan are expected to report lower profits. Uh, Ford even specifically called out that its tariff hit is going to be $1.5 billion this year. So, uh, I think we're in kind of a wait-and-see mode right now as far as some of these immediate impacts for consumers.

And so, what is the overall kind of sentiment that we're seeing among consumers who are both hearing from car brands that they are, you know, putting vehicles out on the lot, the non-tariff vehicles on the lot, and then additionally, how consumers are just trying to make sure that they aren't seeing a higher price when they know that from a range of countries and how vehicles are produced in in essence that there could be some pass-through costs that they may incur one day and trying to front run that instead.

Well, I think it's actually pretty confusing for consumers right now. You're thinking yourself, hey, should I rush to the dealership and try to get something before the car I want is actually impacted by tariffs? Should I wait? Are the tariffs going to actually happen this week or this month? So, it's definitely a confusing situation. That being said, it's actually been a pretty good year for car buying. The seasonally adjusted selling rate was over 17 million by a lot of metrics the last couple months, which is a very strong performance for the US auto industry. Uh, you are seeing some companies like Stellantis, for example, offering employee pricing, which is where they, you know, try to make it basically a cheaper, you know, one-cost sort of price, and companies are getting aggressive, which I do think that could benefit consumers. The auto industry is used to operating on a very low margin circumstances for many of their products. They're used to this increased competitiveness. They're used to macroeconomic headwinds. It's all sort of par for the course for the car business. So, in some ways, I think the car world is uniquely positioned to deal with these headwinds.

And so, with that in mind, what about on the used vehicle side? I mean, we we've even heard the strategy from companies that are in the rental space, but also have a used vehicle sales arm, like Hertz. And within their own, uh, within their own recent announcements, talking about a company's cornerstone cell-right strategy, trying to maximize value, improve unit economics, and ultimately leaning into how they can communicate their own value proposition amid some of the tariff-driven pricing dynamics that they're seeing with used car prices rising and and what they essentially label as DPU declining here. How what does that ultimately mean, especially as you hear companies like Hertz talking about their best quarter for retail vehicle sales in the first quarter of 2025? And where that's moving consumers to?

Well, I think when you're trying to get yourself a deal, you think used car, right? It's just a natural sort of consumer reaction to price hikes that we think will impact the new car market. Uh, I think it's a frustrating time for consumers on the used car front because you're seeing prices basically higher than ever. I saw a figure that said they were $28,000, that was the average price of a used vehicle, uh, earlier this year, which to me is kind of it's almost an astronomical figure. You wouldn't expect to pay that much money for a used car even if it were something more in the premium space. So again, I think it's a frustrating time for consumers. Uh, but for companies, you know, that do have large fleets that they're trying to offload, I do see great opportunity. You have a chance to get in there, perhaps, you know, cycle through some vehicles you might like to, you know, offload from your general rental fleet or whatnot, uh, move the metal, and make a little bit of money. So I think for companies like Hertz, it's a great time to, you know, frankly, make some money and try to even reach new consumers, remind people that you're out there. And it's it's like many things in this economy. It's not really good for everybody, but for certain segments of it, you know, there's really some spotlight opportunity.

So, how is that influencing the summer outlook then for car buying?

So, I think this summer is going to actually be a decent time to buy a car. I think the summer buying season for the car industry, you get into like Memorial Day, then right through Labor Day. People are going to dealerships. That's usually a time, it's nice out. People are interested in into getting something new and setting themselves up for, you know, the rest of the year, school year, you know, the winter. It's human nature, right? So, generally you see decent foot traffic and companies are pretty aggressive. Uh, I saw that the average, um, you know, incentive was over $3,000 last month, which is actually a pretty hefty amount of cash on the hood for vehicles. Credit is still reasonably available. It's not quite as good as it was, but for most people, it's out there. You could use it to finance your new vehicle purchase. We're seeing longer and longer car loans in excess of 72 months because people know that, hey, you can maybe spread out that payment over time. Is that the best financial decision? Probably not, but it helps you get into a new vehicle. So, I actually think this summer is going to be a decent time to buy a car.

All right, Greg. We're going to be watching closely. Maybe I'll go kick the tires somewhere, maybe. Appreciate the time.

Thank you.