Page 12 - GIADA-Sept-2018-Final

TRENDS

2 Factors Perhaps Driving Rise in

Used-Vehicle Sales

By Joe Overby, Arlena Sawyers & Sarah Rubenoff, Auto Remarketing

The retail used-vehicle market is likely The used-vehicle sales growth ,40-, 50-percent discount or getting that
benefitting — at the moment, at least — is amid what Cox Automotive crossover vehicle — 3-year-old crossover
from pulling over and pulling ahead. vehicle — for essentially the same price
senior economist Charlie they would pay for a new small car in the
That is to say, a value proposition that is Chesbrough described as a new market.”
pulling would-be buyers of traditional cars “huge reduction in the car
in the new market over to the used market; In a news release issued Wednesday ahead
and the specter of proposed automotive segment” in the new-vehicle of the call, Kelley Blue Book analyst Tim
tariffs that may be leading dealers to buy sales market during July. Fleming said the monthly new-vehicle
used inventory ahead of such measures market share for car segments was likely
going into effect. “[Sales for traditional cars were] down to be 31 percent, compared to 36 percent
quite a bit on a year-over-year basis, and in July 2017.
Analysts with Cox Automotive posted certainly more than what we were initially
those theories during a sales day expecting. And we think one of the things “Consumers clearly are favoring utility
conference call with reporters earlier this that might be going on is that car buyers vehicles over cars,” Autotrader executive
week. are moving into the used-vehicle market,” analyst Michelle Krebs said during the call.
Chesbrough said during the call.
Used a better buy than new, for some “What we think is exacerbating the decline
Wednesday’s call came right after a month “One of the things that we saw in our in [sales of traditional new cars] is the fact
where used-car sales were expected to recent data from our auction activity that there’s this plethora of used cars, and
reach 3.4 million, according to a late July is that used-car prices are above their more importantly, a richer mix of utility
forecast from Edmunds, a sum that would normal July levels. And so, we think that vehicles coming off lease and back on
beat June used-car sales of 3.2 million there’s probably a number of folks that are the market,” she said. “And we do know
units. That would also translate to a used- looking for buying opportunities in the that affordability is becoming more of an
car seasonally adjusted annualized rate of used-car market,” he said. issue, so the used vehicles provide a value
39.5 million units, compared to the used- alternative to new vehicles. And there’s the
car SAAR of 39.2 million a month before. “Buying that same 3-year-old version of richer mix in terms of utility.”
that new car in the used market at a 30-

10 | GIADA Independent Auto Dealer SEPTEMBER 2018