by Wolf Richter, Wolf Street:

So let’s see how we can put a positive spin on this.

Ford, GM, Hyundai and others tried hard to curtail their sales to rental car companies, or whatever. That’s was the theme among analysts on Monday, after automakers reported crummy June new vehicle sales.

What really happened?

Rental car companies continued to trim their fleets as they’re traversing their own structural hell, squeezed by ride share companies and falling used car wholesale prices. They’re not buying as many vehicles anymore because they don’t need more, regardless of what automakers are trying to do to sell them more.

Retail customers are switching to used cars that are competing often on the same dealer’s lot with new vehicles. They’re particularly after recent-model year cars that look similar to new cars but sell at much lower prices. Dealers buy them at auctions around the country, where rental car companies and leasing companies are selling them. Used vehicle sales are expected to set a record this year north of 41 million vehicles. This is particularly eating into new car sales, the mainstay of rental car companies (rather than new truck sales).

Consumers do this because they’re stretched to the limit by new car prices that continue to rise, even as wages cannot keep up. Edmunds reported that in June:

The average monthly payment jumped to a record of $517 (up from $510 in May)

The length of the average auto loan rose to a record 69.3 months

And the average amount financed jumped by $631 from May to $30,945.

The fact that negative equity on trade-ins hobbles from record to record doesn’t help matters. So something has to give.

And this is what gave:

Overall car and light truck sales in June fell 3% year-over-year to 1.474 million vehicles, according to Autodata. This is the number of vehicles sold and delivered by dealers to their customers, or delivered by automakers to their large fleet customers.

It was the sixth month in a row of year-over-year declines.

Truck and SUV sales rose 4.1% to 933,378 units. But car sales plunged 13.2% to 541,982 units.

For the first half, sales are down 2.1%. Truck sales up 4.6%; car sales down 11.4%.

Sales to fleet customers dropped 7.8% in June, not because automakers refused to sell them, but because fleet customers cut back their orders.

Retail deliveries dropped 1% in June.

The Seasonally Adjusted Annual Rate of sales (SAAR) in June fell to 16.51 million light cars and trucks, the fourth month in a row below the 17-million mark, and the lowest since February 2015. So regardless of how this is being dressed up, it’s not propitious.

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