Enterprise released Length of Rental (LOR) data for the second quarter of 2023, showing a 0.3-day decrease---from 17.7 days to 17.4---compared to the same quarter last year, the first dip in LOR year-over-year since the initial stages of the pandemic.
It was also a 1.5-day decrease from the first quarter of this year, when LOR was 18.7 days, which fits historical seasonal trending of a decrease from the first quarter to the second quarter.
While positive, these results continue to reflect the new normal, as the LOR for the second quarter in 2021 was 13.2 days.
Alaska recorded the highest overall LOR in Q2 at 22.7 days, followed by Georgia (20.5), Colorado (20.2) and Louisiana (20.1).
Hawaii had the lowest LOR with 13.1 days. North Dakota and Iowa were next-lowest at 13.3 days each, with DC (13.5) and Nebraska (13.9) completing the states under 14 days.
Interestingly, the gap between the highest---Alaska---and lowest---Hawaii---LORs was 9.6 days, compared to a gap of 9.0 days in Q2 2022. In the contiguous 48, the gap was 7.2 days between Georgia (20.5) and Iowa and North Dakota (both 13.1). In Q2 2022, this gap was 8.9 days between Louisiana and North Dakota.
Only three states saw a year-over-year increase of a day or more: Minnesota (+1.4), New Mexico (+1.2), and Montana (+1.0). Eighteen additional states saw increases while five other states were flat.
Notably, 24 states, plus Washington, D.C., saw decreases. Rhode Island (-2.0), DC (-1.9) and Louisiana (-1.8) had the largest decreases.
John Yoswick, editor of the weekly CRASH Network newsletter, said: “We’re seeing a number of trends that could account for some---though not a lot---of decline in LOR, at least for now. Shops’ backlog of work tends to drop in the spring, and this year was no exception. The national average backlog was 4.7 weeks in Q2 2023, down from 5.8 weeks the prior quarter.
"Prior to the pandemic, the typical second quarter decline in backlog was about three days. This year, the drop was almost eight days, and the percentage of shops that could schedule a job in two weeks or less increased 14 percentage points to 27%," Yoswick continued. "While that is the highest percentage of shops with a ‘normal’ backlog since October of 2021, it is still far from the pre-pandemic second quarter average of 72 percent. Nearly half of all shops (46%) were still scheduling work four or more weeks into the future. That is a significant decline from 60% in the first quarter of this year, but also far from the typical 7% with that length of backlog pre-pandemic.”
According to PartsTrader’s Chief Innovation Officer Greg Horn, “The overall Q2 2023 measure of median plus two standard deviations of delivery days for all part types was actually lower overall in Q2 2023 compared to Q2 2022; several state-level increases align with the LOR results. States that saw increases in overall LOR in Enterprise’s data, such as Arkansas, Florida, Georgia and Minnesota, also saw similar trends when comparing parts delivery days. Parts delays are still a significant factor in repair time and length of rental, and shops are making a great effort to schedule repairs for drivable vehicles to maximize shop throughput.”
It’s also important to consider the impact from the luxury segment, both ICE and EV.
Ryan Mandell, director of claims performance for Mitchell International, shared some insight: “Luxury make repair frequency increased nearly half a point to 13.28% of all repairable estimates in Q2 2023 compared to Q2 2022 (12.79%). On average, luxury vehicle estimates are written for nearly two additional labor hours (1.83) compared to common make vehicles, as well as an additional 1.3 replacement parts.”
Mandell also shared an important consideration about calibrations, which impact overall repair time: “The frequency of ADAS calibrations increased from 11.28% in Q2 2022 to 16.11% in Q2 2023.”
Drivable
For rentals associated with drivable repairs, LOR in Q2 2023 was 15.5 days, a 0.3-day increase. Alaska also had the highest drivable LOR in Q2 2023 at 18.8 days. Georgia (18.6), Tennessee (17.8) and Louisiana (17.7) were the next-highest.
The lowest drivable LOR for was found in North Dakota (10.5), Hawaii (11.3), Iowa (11.6) and D.C. (11.8)
The highest year-over-year drivable increases were found in Minnesota (+1.6), Alaska (+1.5) and New Mexico (+1.2). Three other states (Washington, Arkansas and Utah) had increases of one day or more. A total of 39 states had drivable increases, with only three flat and eight states, plus D.C., showing drivable decreases.
Non-Drivable
LOR for non-drivable claims was 25.6, a 0.8-day decrease from Q2 2022.
Montana had the highest LOR at 36.0 days, a 3.1-day increase. Next highest was Alaska (35.4), followed by Colorado (32.2). All told, eight states had non-drivable LOR greater than 30 days, with six more states at 28 days or higher. Oregon (31.5) had the highest increase at 3.3 days.
Positively, only 13 states had non-drivable LOR increases, while 37 states plus D.C. had decreases. Compare this to Q2 2022, when every single state and D.C. had an increase of at least 1.2 days.
The lowest non-drivable LOR belonged to New York at 21.1 days, followed by D.C. (21.2), Iowa (21.6) and Nebraska (21.9).
Delaware had the highest decrease, down 3.4 days. Rhode Island (-3.2), D.C. (-2.5) and Indiana (-2.4) also saw significant decreases.
Abby Andrews