April Sees Softening in Floor Traffic, Closing Ratios, CNW Reports
Things didn't go as expected this month, with CNW reporting that the expected increase in floor traffic and closing ratios never materialized.
BANDON, Ore. — After floor traffic and closing ratios softened considerably at the halfway point of April, CNW predicted that things would turn around during the last 10 days of the month. Today, the market research firm reported that the uptick never happen.
Floor Traffic for the month grew at a 1.5 percent rate vs. the same month a year ago, while closing ratios slipped to 32.9 percent from March’s 39.8 percent, a decline of 17.5 percent.
“Floor traffic today is an indicator of future sales and the April figure may well be indicative of a 13.9 to 14.1 SAAR in the middle months of the year,” Spinella wrote in an e-mail. “It’s too early to panic, but the response is likely to be higher incentive levels to boost showroom traffic.”
Looking at the used-car market, CNW reported that total used-car sales in April came in at approximately 3.79 million, a 40.2 percent increase vs. March. However, total sales were up only 7 percent vs. a year ago.
“The big April-versus- March increase is normal as weather conditions and refund checks nudge consumers to buy a long-needed used vehicle,” Spinella noted.
Fueling the month-over-month increase, Spinella said, was the rise in FICO score of those buying used cars, the first increase in a year.
In April, used-car buyers had an average FICO score of 624.83, up from March's 617.88, February’s and January’s 619.59 average scores. “Some financial institutions are tightening credit criteria a tad for used-car buyers, especially those looking at vehicles 8 years old and older,” Spinella said.
April sales:
Franchised dealers: 1,367,543 units (down 0.03 percent)
Independent dealers: 1,237,725 (down 8.02 percent)
Private party sales: 1,187,336 unit (up 18.39 percent)
Average Price of Used Vehicles:
Franchised dealers: $12,293 in April vs. $11,462 a year ago.
Independent dealers: $10,289 in April vs. $9,913 a year ago.
Private party sales: $8,538 vs. $8,797 a year ago.
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