Kelley Blue Book’s Micah Tindor on Negative Equity and Used-Car Demand

Micah Tindor of Kelley Blue Book joins Inside Automotive to discuss how affordability pressures, inventory shortages, and changing consumer behavior are reshaping the used-car market.

As vehicle prices remain near record highs and interest rates stay elevated, dealers face mounting challenges acquiring inventory and serving increasingly cautious consumers. Tindor explains why affordability concerns, rising negative equity, and a shrinking pool of sellers could make the second half of 2026 particularly difficult for retailers. He also explores how consumers are redefining convenience when selling vehicles and how dealerships can compete in an evolving disposal landscape.

Key discussion points:

•  Why affordability concerns are slowing vehicle replacement cycles 
•  The impact of rising negative equity on dealership transactions 
•  How consumers are "channel shopping" between trade-ins, private sales, and at-home vehicle buying services 
•  Ongoing used-vehicle inventory shortages and growing competition among dealers 
•  Why convenience and trust are becoming as important as price in vehicle disposal decisions 
•  Kelley Blue Book’s new vehicle disposal platform and what it means for dealers

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Transcript

Welcome And What’s Changing

Announcer 0:07

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:13

There's a lot happening in the used car market right now, and consumer behavior continues to shift in some interesting ways. So what are dealers missing and what trends are starting to take shape as we see them uh out there? So joining us now to break it all down is Micah Tinder, who is an AVP of consumer vehicle disposal at Kelly Blue Book. So thank you so much, Micah, for joining us on the show today.

Micah Tindor 0:35

Thanks, Jim. Good to be with you again. Yeah.

Jim Fitzpatrick 0:36

And in studio, no less. So thank you for making the pilgrimage down from North Carolina to join us right here. It's always the best, it always makes for the best interviews. Agreed. Agreed. Plus, I get to sit behind a desk like a newscaster. That's right. That's right. You look like a newscaster. If this thing at, you know, at uh Cox doesn't work out, come on over for a maker job, right? Just kidding. So uh last time that you were on with us last year, um, you you were talking about the disposal side of of the market, which I don't think gets enough um uh FaceTime or or media time, I should say, out there. Not uh there's not enough discussion about it in the industry. Um you asked us to have you back on, you know. Well, here you are. So let's kind of set the stage.

Affordability Gets Tight For Buyers

Jim Fitzpatrick 1:18

What are the market conditions telling you right now, heading back uh as as we head into the second half of the year?

Micah Tindor 1:23

The market conditions are really starting to say affordability is setting in and it's looking like it could be a challenging second half of the year. Okay. If we look at the most recent survey, around 50% of consumers are saying they're living paycheck to paycheck. Which is a crazy stat to think half of consumers live in paycheck to paycheck. This is at the same time that we're expecting consumers to pay some close to record high new car prices, knock on the door 50 grand. And APRs are incredibly high. Yeah. And what we're starting to see is that's really impacting people's ability to sell their current vehicle and get into a new vehicle. Yeah. And if we look at what's the impact on selling their current vehicle, between 2024 and the end of this year, we'll see 14% less people selling their vehicle. Wow. Just less vehicles to sell as it gets more and more expensive. Sure. At the same time, then it gets harder to get into a new vehicle because most people are not going to choose to walk. Yeah. And we've had four consecutive months of sales declines. We're expecting in the in the back quarter we might see another two to three percent sales decline. And that's before we've really seen true tariff impacts. Yeah. I mean, we saw Tivoyota just announced they lost $1.2 billion on their best sales year ever. Yeah. Wow. Other OEMs are taking huge hits, billions of dollars of hits on tariffs, and at some point they're going to have to pass those down. So when we take a look at the market right now, if affordability is the air we breathe, the air is getting thin. And it's really starting to become more challenging on dealers, and we should expect it to be a more challenging buy and sell second half of the year.

Jim Fitzpatrick 2:47

Yeah, no question. I hear of those same sentiments from dealers all day long. So given the state of the market right now, what what consumer shifts are you

Channel Shopping And Negative Equity

Jim Fitzpatrick 2:55

seeing?

Micah Tindor 2:56

There are two big consumer shifts that are really interesting that are um impacting dealers in a strange way that I'd like to talk about. The first one is that consumers are starting to do something new, which is shop channel for disposal.

Jim Fitzpatrick 3:07

Okay.

Micah Tindor 3:08

So it used to always be that they just looked at price, and last time I was on, we talked about the average millennial or Gen Z is four to six cash offers. Yeah. Now they're also considering other channels. Should I sell peer-to-peer or should I sell from the convenience of home? Yeah. The second big change that we're seeing in the impact of the affordability on the consumer is that we now see 31% of consumers are underwater on their loan when they go into a dealership right now. 31%. 31%, and on average it's $7,100. Wow. So the that that conversation, that trade conversation or a straight buy conversation of the dealer is getting a lot more emotional for the consumer, and they're gonna fight harder. Yeah. And what's interesting is we think about what is the dealer impact of the salt. I put my retail hat back on. We see that there's about 1.5 million less vehicles in market right now than average. Which means naturally dealers have to turn to the consumer market to source some additional inventory. Definitely. So most dealers are going and hiring staff, buying tooling, and they're going out and trying to win more consumer cars. But if we hearken back to what I just said, 14% less people are going to sell their vehicles. Yeah. We're starting to see dealers report, and statistically, it's going to have to be that dealers see a lar lower ROI on their acquisition efforts. Yeah. More money, more dealers chasing less cars. So it's becoming a much more challenging trade market as consumers are underwater, as they're shopping channels, and as dealers are seeing less ROI on each of those trades right now.

Trade Ins Become An Emotional Fight

Jim Fitzpatrick 4:27

Yeah, yeah. Let's talk uh trade-in specifically. The trade-in has always been kind of the wild card in the deal. They go into the dealership and uh they might know the sale price or they've negotiated a number, but then all of a sudden the trade-in comes into play, right? Yep. The thing that dealers used to make uh you know, pencils work on that, right? Yeah. So talk to us about that.

Micah Tindor 4:46

What is interesting about trade right now is that consumers are shopping other channels. And I mentioned that earlier, but I think it needs to be unpacked when we think about it as trade. It used to be the consumers coming in and the main question is, can you match this other offer I have? Right. Now consumers are coming in and they're saying, Can you match this other offer? But they're also thinking about other things. The ability to get a price is now ubiquitous. Right. Which means those other four or five things that have historically influenced the decisioning, convenience, timing, financial security, how do I feel about the deal, those now are becoming much more prevalent in that engagement with the dealer. So as I'm sitting at the desk and I'm trying to work a trade deal, I now need to consider has a consumer looked at other options? And I need to consider have the consumers gone through that checklist and what is important to them besides the value? Am I touching on convenience enough? Am I am I giving them an easy enough way of doing this? Am I tailoring it to the on-demand ecosystem that we're in right now?

Jim Fitzpatrick 5:47

Right, right. Yeah, for sure. Um you say there's a there's a changing consumer trends out there that we talked a little bit about there, that they're looking at the idea of getting rid of their car completely different, which which I completely get. Not just about price shopping, we're also talking about you know the about their last time,

Personalized ROI And Convenience Wins

Jim Fitzpatrick 6:03

but now they're shopping uh but now are they shopping how they dispose of their vehicle as well? I g I guess they are. I mean, I that that seems to be a hot topic.

Micah Tindor 6:12

It it really is. And if we look at where are consumers disposing, you know, my vehicle is consumer titles consumer vehicle disposal. So we look at people selling peer-to-peer, selling from the convenience of home, which is a newer market, and selling to a dealer. We still see that 17 million people sell peer-to-peer every year. That is still a very strong segment of the market, and we see that around a million people are now selling from the convenience of home. And what we're really seeing is that people are starting to look at what is the ROI, personal ROI of my disposal experience, which is why we call it disposal. Instead of just saying trade, we're now calling it disposal because consumers are considering the full ROI option. I might want to go peer-to-peer because statistically I'll get a little bit better value. Yeah. But is the effort worth it? Is the risk of getting stabbed in the parking lot on a test drive worth it? Versus going to a dealer and transacting right now. So that whole conversation for consumers around channel shopping is really around personalized ROI. And who's going to give me the best return on the pieces of those five elements of the buy and sell equation that really make me feel good and give me uh confidence to transact. That's right.

Jim Fitzpatrick 7:18

And and as we see Carvana's commercials out there where the person pulls up to the house, says, hey, here's the check, they get the title, they put it on the flatbed, and they're done. I mean, it's it's simply that easy, right? It isn't if you no, just the same thing. Consumers, it's enticing to the consumers when they see a transaction go that easy.

Micah Tindor 7:37

It really is. I mean, let's think about how convenient is the rest of life. I want food, yeah. I no longer have to get my car and go anywhere. It shows up at my house. Groceries, same thing. Exactly. I want to drive somewhere. A car will come get me. That's right. I want to buy something, it shows up at my house. That's right. More and more consumers are expecting that to pervade down into the automotive space. And that's really what we're talking about here. That personalized ROI where everyone expects it to be just exactly what they want, when I want, how I want, um, with the value that I want, is now in that space when consumers think about selling their car into a dealership.

Jim Fitzpatrick 8:07

That's right, that's right. And convenience means so much today. Uh, in some cases, maybe even more than the final price itself, right?

Micah Tindor 8:14

You're 100% right. It is convenience is the number two most important thing to a consumer when they're getting rid of their vehicle. Right. And um, I'm a busy guy, you're a busy guy. I would happily take $100 less in my car, $300 less in my car if it's super easy because we don't have to think about it.

Jim Fitzpatrick 8:29

That's right. Yeah, I don't want to shop around all dealerships. I don't to your point, I don't want somebody coming to my home. I mean, in in my book, uh that might even be number one, overprice, right? I mean, that's that's uh that's what I'm all about is the convenience. I agree with that. It would probably

Kelley Blue Book Builds A One Stop Path

Jim Fitzpatrick 8:43

be the same for me. Yeah, exactly, exactly. So uh this all sounds really exciting for Kelly Blue Book, but what should dealers be excited about? How does this translate into their success, more opportunities to capture on trade-ins and win more cars?

Micah Tindor 8:55

What we are hoping to be able to accomplish from a Kelly Blue Book perspective is we're turning 100 years old this year.

Jim Fitzpatrick 9:00

Yeah.

Micah Tindor 9:01

The logo back there. I know.

Jim Fitzpatrick 9:03

Yeah, that's incredible.

Micah Tindor 9:04

Um and one of the ways that we're evolving is that we are now bringing all those opportunities for the consumer to one point to make it convenient. Given the all the options, sell to peer-to-peer, sell for convenience, sell to dealer. Right. And we're going to give them the guidance to make that informed decision. How long does it take me to sell? What's my competitive set, all that sort of stuff. Um what it means to the dealer is that Taylor Blue Book's hoping to win more of the consumers in that with that tailored experience so that we can get more of that inventory down to the dealer. If we just talk brass tacks for a minute, in the peer-to-peer market, we have a lot of peer-to-peer consumers. The challenge is when we go after them with some of those tools, we're going after people who aren't necessarily asking for us to come talk to them and might not even want to talk to a dealer. Yeah. So what we want to do is create a hand raiser ecosystem where consumers can raise their hand in our ecosystem and we can connect dealers to them and take away some of that friction.

Jim Fitzpatrick 9:52

Yeah.

Micah Tindor 9:53

For those who want to sell from the convenience of home, we want to offer that as a new capability to our dealer partners. There's, as I mentioned, around a million consumers. We want to open that up to the dealer network. So right now we're learning through the tools and the rules that you need to engage a consumer and buy from home.

Jim Fitzpatrick 10:07

Okay.

Micah Tindor 10:07

And then we're going to plumb the dealers in. And if they already have the tools, then we'll just give them the rules. Okay. If they need the tools, we'll give them the tools. But for us, it's really about how can Kelly Bluebook, with that trusted brand for a hundred years, give the consumers the trusted experience they want. Right. And then how can we parlay that down to the dealers? We think, you know, talking about ordering foods just like that. You trust the food ordering app, it's parlayed down to you through the partners who actually execute the dealers, the boots on the ground. So that's what it's all about for us. Us winning the consumer at the top so the dealer can really win the vehicle at the bottom.

Jim Fitzpatrick 10:37

Yeah, yeah. And that and to your point, the trusted name means a lot to a consumer. I mean, they know the Kelly Blue Book name, so they know that's the company that stands behind this transaction, right? Which is which is incredible.

Micah Tindor 10:48

Yeah, yeah. You're 100% right about that. In the end, in a world where we're gonna touch things digitally, trust in the brand that you engage is more important than ever. That's right. And that's both for Kelly and it's for the dealer. Yeah. And that's what how so many of our dealer partners are winning, right? The customer has all those options online, but when you come in person, it's Tindor, whatever brand you have. Yeah. Who's giving you that experience, caring for, make it convenient, that medley of things that you need to see for you.

Jim Fitzpatrick 11:14

That's right. In many cases, the consumer might even feel more comfortable about the Kelly brand than they even do about the dealership, only in the sense that they don't know the dealer brand as well. You know, if you're new to the area, if you've not purchased a vehicle there before, maybe you saw it on a sign or a billboard, but you know the Kelly Blue Book. I mean, people refer to it many times. They'll come into a dealership and say, What's the Kelly Blue book? Maybe we didn't even use the Kelly Blue book at the time, you know, but that was the gold standard in terms of evaluations of vehicles, right? Yep. And and there's something to be said for that.

Micah Tindor 11:45

Yeah. A hundred years ago, Les Kelly started as a dealer. Wow. Um it's it's still dealer DNA all over. Um so we're really excited about what's coming next. We think that what the market really needs is that opportunity to sell your vehicle in one spot, get all the right information, let the consumer have the control of where they need to go with the right insights, make the right decision, and then we'll just do the work with our dealer partners and figuring out how we can make sure the dealers are the ones who pay off on that process. This is gonna be very exciting

July Launch And How Dealers Join

Micah Tindor 12:13

for dealers.

Jim Fitzpatrick 12:13

I'm putting my dealer hat on for a moment here, and uh to be able to compete in this area against a Carvana, um, or even a CarMax for that matter, right? They've been very aggressive in this over the years as well. And when people, I think the average consumer thinks about this what's the easiest way to sell your car, get rid of your vehicle, those two names come up, you know? Um I was in the business when uh if you didn't give somebody the right number on the car, uh salespeople would say, well, go down the street to CarMax, okay, and see what they'll give you, and they just bring us the cat, which blows me away that we would even attempt to do something like that, right? But it was a reality, you know?

Micah Tindor 12:47

Yep. And you're right. And what's interesting is as more and more people get underwater, yeah, as I mentioned earlier, a few people are gonna stroke a check for $7,000 and walk somewhere else to buy a car. So more and more of those 51, 54% of people eventually that are underwater are going to be buying from whoever they're disposing to. So it really is the underwater flood is a challenge for the market, and we don't talk about it enough, but it is a massive opportunity for dealers. Yeah. Because those other channels, peer-to-peer, you can't get out from an underwater loan. You have to go to a dealer to get out from your underwater loan. So we have a flood coming, but it's a the dealers are prepared. They're the sandbags, and everyone's gonna want some sandbags when the flood shows up.

Jim Fitzpatrick 13:23

I love it, I love it. Last question, and this uh is the one that I always ask because a lot of times we talk about things that are coming. Where are you in the rollout process and what can dealers expect to see from Kelly Blue Book in the coming months?

Micah Tindor 13:36

July. Okay. Where we are in the rollout process. We will have this up and running in July. We've been testing through it for the last few months. Okay. Um, and July 1st is when we're gonna go live with it. What dealers can expect is to have an easier process with a more engaged consumer that gives them the ability then to really do what they do so well. Yeah. We want to give the consumer all that information, as I mentioned, upper funnel, let them make the right decisions for themselves. But what we're gonna do and what we're committed to do with our dealer partners is leverage their skills, map them in, let them put the right offer on the vehicle so that they can win the vehicle as we win that consumer trust. So I'm excited about it. It all kicks off in July. You'll see some iterations as as we grow it over time. Of course, we're not gonna build the perfect thing and wait to the last minute to release it. We're gonna learn as we go. So we'll have iterations, but July 1st is when it all kicks off. Wow, that's fantastic.

Jim Fitzpatrick 14:23

And and this is something that a dealer can call you now and say, hey, I want to be first on my block to get this going, or what?

Micah Tindor 14:30

Absolutely. Okay, absolutely. They can they can get in line for it. We're starting to prepare some tests and get some dealers lined up, but it's something that we plan on getting into our whole dealer body as soon as humanly possible. Wow.

Jim Fitzpatrick 14:40

That's fantastic. That's great. We'd love to have you back and maybe one of your dealers that are on the program so that they can share with our viewers how it's working.

Micah Tindor 14:47

Absolutely.

Jim Fitzpatrick 14:48

Once we get lab, we'll set that up. Good. Thanks so much. Mike Tinder, AVP of Consumer Vehicle Disposal. Thanks so much for joining us on the show.

Micah Tindor 14:55

Thanks for having me, Jim. Good to be here. Awesome.

Announcer 15:02

Thanks for watching Inside Automotive with Jim Fitzpatrick.