Used Sales Stall in 2017
In Q1 2017, 10.2 million vehicles were sold in the used market, a decrease of 1.3% versus the previous year. Franchise used sales also showed a reduced number of units sold, with a 0.3% decrease versus 2016. Fewer consumers trading in their existing vehicle upon their new purchase could be side- stepping inventory from dealers.
CPO Volume Remains Flat
Certi ed Pre-Owned sales inched up with a 0.1% li over 2016 and accounted for 22.2% of all franchise used sales.
Used Values Up, but Mixed Signals Ahead
The average retail used vehicle sold for $19,227 in Q1 2017, an increase of 2.1% year over year. This record-breaking high can partially be attributed to a higher mix of vehicles being sold that are only 3 years old or newer (53% of sales in Q1 2017) and these 3-year-old vehicles began with much higher MSRPs versus years prior. One caveat is that, while the MSRPs are up and so is the share, these vehicles aren’t retaining nearly as much value as before.
Older Inventory Squeezed, Newer in Surplus
In Q1 2017, the average age of traded-in vehicles was 6.4 years old, essentially at from last year, but the percent of buyers willing to part with their existing vehicle is down from 45.0% last year to 42.8%. With a forecast for fewer sales, this further constrains the availability of older vehicles. On the other hand, leasing’s supply of near-new is forecast to last nearly three more years.