Salesmen wait for customers at the Brent Brown Toyota dealership in Orem, Utah, US, on Monday, April 6, 2020. Picture: BLOOMBERG/GEORGE FREY
Prices are falling faster and steeper than JPMorgan was expecting, lead analyst Ryan Brinkman wrote in a report on Monday, citing mid-month data from Manheim. “The real losers of the development are likely the captive-finance subsidiaries of automakers like GM and Ford, and the rental-car companies,” Brinkman wrote. If prices finish the second quarter 10% lower than envisioned, he estimates losses could total $3bn at GM Financial and $2.8bn at Ford Credit.
“What we’re seeing right now is essentially the market is illiquid — and that’s the physical auctions as well as the digital auctions,” Jennifer Laclair, the CFO of Ally Financial, said on an earnings call. The lender had been expecting a 5%-7% drop in used-car values for the year.