A deep dive into the automotive industry's hidden reliance on fleet sales reveals an alarming trend: nearly 20% of new vehicles sold are going to fleet customers rather than individual buyers. The hosts discuss how this shift impacts overall sales figures, masking a significant decline in consumer purchases. With rising vehicle prices averaging around $50,000, the episode highlights the affordability crisis facing many potential buyers. The conversation also touches on the implications of manufacturers prioritizing fleet sales over retail customers, leading to a potential market collapse if consumer demand continues to dwindle.
Today on CarEdge Live, Ray and Zach discuss the latest info on fleet sales. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
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"...a tremendous increase, there's another chart showing it, in fleet sales for the month of November, a significant increase in vehicles sold to fleet companies, whether that be commercial, rental, government, or any of those three."
Fleet sales are when companies buy many cars at once, like rental companies or government agencies. This helps car manufacturers sell more vehicles quickly.
Fleet sales refer to the sale of multiple vehicles to a single customer, typically businesses or government entities that require a large number of vehicles for their operations. This can include cars for rental services, government agencies, or commercial use, which can significantly impact overall sales figures for automakers.
"...with the cafe standards being kind of put on hold or reversed by the Trump administration, will we see that lead to more affordable cars?"
CAFE standards are rules that set how many miles per gallon cars and trucks need to get. They help make cars use less fuel and be better for the environment.
CAFE standards, or Corporate Average Fuel Economy standards, are regulations in the United States aimed at improving the average fuel economy of cars and trucks produced by manufacturers. These standards are designed to reduce energy consumption by increasing the fuel efficiency of vehicles.
"...the K cars, the little cars, the 660cc engine vehicles that are made in Japan, will that solve our affordability crisis in this country?"
K cars are small cars made in Japan that have very small engines, usually around 660cc. They are designed to be affordable and easy to drive in cities.
K cars refer to a category of small, lightweight vehicles that are popular in Japan, typically with engine displacements of 660cc or less. These cars are designed to be economical and efficient, making them suitable for urban environments.
"...I want to focus on one brand in particular, and that would be Stellantis, that Stellantis is, Chrysler Dodge, Jeep Ram, Alpha, Fiat, et cetera."
Stellantis is a big car company that makes cars under different brand names like Chrysler, Jeep, and Fiat. It was created when two companies merged together.
Stellantis is a multinational automotive manufacturing corporation formed from the merger of Fiat Chrysler Automobiles and PSA Group. It encompasses several well-known brands including Chrysler, Dodge, Jeep, Ram, Alfa Romeo, and Fiat.
"...what we're seeing right now is a tremendous increase in fleet sales, specifically from rental car companies, which is interesting."
Rental car companies are places where you can rent a car for a short time, like a few days or weeks. They usually buy many cars at once to have different options for customers.
Rental car companies are businesses that provide vehicles for short-term rental to consumers. They often purchase vehicles in bulk from automakers to maintain a diverse fleet for their customers.
"This chart shows you the average transaction price of new cars, that's the blue line, and it shows you the average incentive spend as a percentage of that average transaction price on the yellow line."
The average transaction price is how much people usually pay for new cars, including any deals or discounts they get. It helps show how much cars cost on average.
The average transaction price is the average amount paid by consumers for new vehicles, including any discounts or incentives. It provides insight into market trends and consumer spending.
"...average incentive spend as a percentage of that average transaction price on the yellow line."
Incentive spend is the money car makers use to give discounts or deals to help sell cars. It can lower the price you pay when buying a new car.
Incentive spend refers to the money that manufacturers allocate for discounts, rebates, or special financing offers to encourage consumers to purchase vehicles. This can significantly affect the final price a consumer pays.
"...but tariffs. You can only eat so much in tariffs and then still be able to incentivize your customers."
Tariffs are extra fees that the government charges on things brought in from other countries. This can make cars more expensive for companies to make and sell.
Tariffs are taxes imposed on imported goods, which can increase the cost of manufacturing for car companies that rely on foreign parts or vehicles. These costs can affect pricing strategies and the ability to offer incentives to customers.
"Yeah, somebody working at a Chrysler dealership or your local Nissan dealership."
Nissan is a popular car brand from Japan that makes many different types of vehicles, including cars and trucks.
Nissan is a Japanese automobile manufacturer known for producing a wide range of vehicles, from compact cars to trucks and SUVs. The brand is recognized for its innovation and has a strong global presence.
"Yeah, somebody working at a Chrysler dealership or your local Nissan dealership."
Chrysler is a car brand from the United States that makes various types of vehicles, including family cars and vans.
Chrysler is an American automobile manufacturer that produces a range of vehicles, including sedans, minivans, and SUVs. It is part of Stellantis, a multinational automotive company formed from the merger of Fiat Chrysler Automobiles and PSA Group.
"The average new vehicle MSRP was higher 1.7% year over year for the month of November. We're up to almost $52,000, being the average MSRP, not transaction price, but MSRP."
MSRP is the price that car makers suggest you should pay for a new car. It's like a sticker price that you see on the car when you go to a dealership.
MSRP stands for Manufacturer's Suggested Retail Price. It is the price that the manufacturer recommends for the vehicle, which can serve as a starting point for negotiations at dealerships.
"And then new vehicles sold in November with an MSRP below $30,000, accounted for 7.5% of total sales last month, down 10% year over year."
New vehicles are cars that are brand new and have never been owned before. They usually have the latest technology and come with a warranty.
New vehicles refer to cars that have just been manufactured and are being sold for the first time. They typically come with the latest features and warranties.
"It's important to remember that KBB average transaction price reflects what consumers choose to buy,"
KBB is short for Kelley Blue Book, which is a guide that helps people know how much cars are worth. It shows prices for both new and used cars.
KBB stands for Kelley Blue Book, a trusted resource for vehicle pricing and valuation in the automotive industry. It provides information on new and used car prices, helping consumers make informed decisions.
"consumers are making. Let's hone in on the Ford F-Series, for example, here. And you can see the average monthly payment"
The Ford F Series is a group of trucks that are very popular in the U.S. They are known for being strong and useful for many different tasks, which is why so many people choose them.
The Ford F Series is a line of trucks that includes the F-150 and its larger siblings, known for their strength, capability, and versatility. It has been one of the best-selling vehicle lines in the United States for decades, appealing to both commercial and personal users. The F Series is often discussed in terms of its sales performance and impact on the truck market.
"...n see the average monthly payment is on the F-150 Raptor, which 7% of all Ford sales, and this is a data s..."
The Ford F-150 Raptor is a tough truck made for driving on rough roads and off-road adventures. It has a strong engine and special features that help it handle tough conditions, making it popular with people who love outdoor activities.
The Ford F-150 Raptor is a high-performance variant of the popular F-150 pickup truck, designed for off-road capabilities and rugged terrain. It features a powerful engine, advanced suspension, and aggressive styling, making it a favorite among truck enthusiasts and adventurers. Its significance in the market is highlighted by its sales figures, representing a notable percentage of Ford's overall sales.
XLT is a version of the Ford F-150 that comes with more features than the basic model. It usually has nicer interior options and some extra technology.
XLT is a trim level for the Ford F-150, which typically includes additional features and options compared to the base model. It often offers a balance of comfort and utility.
"Let's come over here. Car edge 10% rural affordability, okay? Read the little AI..."
The Ford Edge is a medium-sized SUV that is great for families and everyday driving. It has a nice mix of comfort and technology, making it a good option for people who need a reliable vehicle.
The Ford Edge is a midsize crossover SUV that offers a balance of comfort, technology, and performance. It is designed for families and individuals looking for a versatile vehicle that can handle daily commutes and weekend adventures. Its affordability and features make it a popular choice in the competitive SUV market.
"...The latest Kelly Blue Book data shows that this data..."
Kelly Blue Book is a guide that helps you find out how much a car is worth, whether it's new or used. It shows prices based on what people are paying in the market.
Kelly Blue Book is a trusted resource for determining the value of new and used vehicles. It provides pricing information based on market trends and vehicle conditions.
"Overado. The average payment on the Silverado, the most popular Silverado,"
The Chevrolet Silverado is a big truck that can be used for work or fun. It's known for being strong and able to carry heavy loads, which makes it a favorite choice for many people who need a reliable vehicle.
The Chevrolet Silverado is a full-size pickup truck known for its versatility, strong towing capabilities, and range of configurations. It consistently ranks among the best-selling vehicles in the United States, appealing to both work and leisure users. The Silverado's popularity is often reflected in its average payment figures, indicating its widespread acceptance in the market.
"...ment on an F-150. I mean, here, let's look at the Tundra. That's even more."
The Toyota Tundra is a large truck that is built to last and can handle tough jobs. It's a good option for people who want a dependable vehicle that can also be used for everyday driving.
The Toyota Tundra is a full-size pickup truck recognized for its durability, reliability, and strong resale value. It is designed for both everyday use and heavy-duty tasks, making it a solid choice for truck buyers. Discussions about the Tundra often revolve around its performance and pricing compared to competitors like the Ford F-150.
"...this giant-ass SUV. You know, why is the Cadillac Escalades they can't keep them in stock?"
The Cadillac Escalade is a big, fancy SUV that is very comfortable and has a lot of luxury features. It's popular among people who want a stylish and spacious vehicle, which sometimes makes it hard to find in stores.
The Cadillac Escalade is a luxury SUV known for its spacious interior, high-end features, and powerful performance. It represents the pinnacle of Cadillac's offerings and is often associated with status and prestige. Its popularity and high demand can lead to limited availability, making it a topic of interest in discussions about luxury vehicles.
"We bought a 2026 Volkswagen Atlas SC Tech all-wheel drive. Now, Volkswagen is a great brand..."
All-wheel drive means that all four wheels of the car get power from the engine, which helps the car grip the road better, especially in rain or snow.
All-wheel drive (AWD) is a drivetrain system that provides power to all four wheels of a vehicle simultaneously, improving traction and stability, especially in adverse weather conditions. This feature is particularly beneficial for SUVs like the Atlas.
"Now, Volkswagen is a great brand to be targeting right now, Dad, because they are losing money..."
Volkswagen is a car company from Germany that makes many types of cars, including popular models like the Golf and the Jetta.
Volkswagen is a German automotive manufacturer known for producing a wide range of vehicles, including sedans, hatchbacks, and SUVs. The brand is recognized for its engineering quality and iconic models like the Beetle and Golf.
"...because they are losing market share, and they have an oversupply of inventory."
An oversupply of inventory means that there are too many cars available for sale compared to how many people want to buy them. This can lead to sales and lower prices.
An oversupply of inventory occurs when a manufacturer has more vehicles available than there is demand from consumers. This situation can lead to discounts and promotions as companies try to sell off excess stock.
"After a $3,749 dealer discount, plus a $3,000 Volkswagen rebate..."
A dealer discount is when the car dealership lowers the price of a car to make it more appealing to buyers. It's a way to encourage people to buy from them.
A dealer discount is a reduction in the price offered by the dealership, often used as a sales tactic to attract buyers. It can vary based on promotions, inventory levels, or negotiation outcomes.
"plus a $3,000 Volkswagen rebate, the OTD price with no dealer add-ons..."
A rebate is money that you get back after buying something, like a car. It's often used to encourage people to buy certain models.
A rebate is a partial refund given to a buyer after a purchase, often used as an incentive to encourage sales. In the automotive context, manufacturers may offer rebates to boost sales of specific models.
"the OTD price with no dealer add-ons was $48,400."
Dealer add-ons are extra things that a car dealership might try to sell you when you buy a car. They can be things like extra protection for the car or warranties, and they usually cost more money.
Dealer add-ons are additional features or services that a dealership may offer when selling a vehicle, often at an extra cost. These can include things like extended warranties, paint protection, or other accessories.
"We financed that 3.84% for 60 months to a credit union."
Financing means borrowing money to buy a car and paying it back over time, usually with extra money added for interest. It helps people afford cars without paying all at once.
Financing a vehicle means taking out a loan to pay for it, which is then repaid over time with interest. This allows buyers to spread the cost of the vehicle over several months or years.
"financed that 3.84% for 60 months to a credit union."
A credit union is a type of bank that is owned by its members. They usually offer better loan rates and services, like car loans, compared to regular banks.
A credit union is a member-owned financial institution that provides banking services, including loans for vehicles. They often offer lower interest rates compared to traditional banks.
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