Used Vehicle Market Recovery: Asbury Automotive Adapts to Changing Dynamics Amid Economic Uncertainty

### Used Vehicle Market Dynamics Indicate Recovery Amid Economic Uncertainty

Asbury Automotive Group is poised in a revitalizing used vehicle market, reflected in the latest report from Cox Automotive regarding the Manheim Used Vehicle Value Index. The index reports a notable 4% increase in used vehicle prices in February compared to the previous year, reaching a value of 212.3, the highest since September 2023. This upward trend follows a 0.8% rise from January, as dealerships accelerate their acquisitions to bolster their inventories ahead of what they anticipate to be a strong spring selling season. According to Jeremy Robb, Cox's chief economist, the increased sales conversion rates among dealers point to vigorous demand, underlining a recovering market that could significantly benefit automotive groups like Asbury.

The optimism from dealers stems from various factors, including anticipated increases in consumer tax returns, which are expected to provide additional purchasing power. This potential surge in buying capability could offset concerns stemming from broader economic uncertainties. However, notable geopolitical tensions, such as the ongoing turmoil in Iran, present challenges to consumer confidence, potentially impacting the market by leading to rising gas prices. Asbury Automotive must navigate these complexities, striking a balance between seizing buying opportunities and responding to external pressures that could influence consumer behavior.

Despite the pressures, the current climate reflects historical trends where used vehicle prices remain high compared to pre-pandemic levels, although they have decreased slightly from the record highs of over $28,000 in 2022 to around $25,533 in January. The forecast from Cox Automotive suggests that wholesale prices of used vehicles in the Manheim Index could rise by 2% above December 2025 levels by the end of this year. This reading indicates a continued balancing act between supply and demand dynamics, suggesting a future where prices will remain in flux as dealers adjust to shifting economic realities. Asbury Automotive is strategically aligned to capitalize on this landscape, aiming to improve inventory while addressing customer needs during the anticipated busy season ahead.

In addition to the pricing trends, the report emphasizes the importance of adapting inventory strategies. Asbury and similar automotive groups are encouraged to stay attuned to these market signals, ensuring that they maintain a diverse and appealing selection of pre-owned vehicles. As the tax refund season progresses, demand may heighten, and businesses must be prepared to meet consumer interests.

Furthermore, as the industry faces fluctuating wholesale prices and external economic pressures, dealerships like Asbury Automotive recognize the critical need for agility. This fluidity in the market serves as a reminder of the inherent challenges and opportunities that characterize the used vehicle sector, necessitating a responsive approach to inventory management and customer engagement.