You can probably expect nearly 40 million used-car sales this year, according to the latest Manheim Used Vehicle Value Index report.
Citing NADA data, Cox Automotive chief economist Tom Webb said in that that growth in used sales has accelerated since the year’s outset. The full-year sum, he said, should “approach 40 million.”
Giving some additional context, Webb noted: “Part of this is ‘forced churn’ created by soaring new vehicle sales, but it is not churn conducted at a loss. Indeed, net profit margins are strong.”
As AuSM reported earlier, there were more than 30.7 million used sales in the first three quarters of the year, which beat last year's pace by 1.8 percent, according to NADA.
In late October, TrueCar was predicting the industry would reach $640 billion in used-vehicle revenue this year (up from $599.7 billion a year ago) with 38.4 million used cars sold, a 3.8-percent increase over 2014.
Another solid sign is the fact that the seven publicly traded dealership groups* have gone 25 consecutive quarters with same-store retail used-unit sales increasing, Webb said. In the most recent quarter, they were up nearly 5 percent on a sales-weighted basis.
“Although the average gross margin on these sales fell to a new low during the quarter, operating efficiencies and greater throughput per store produced record used-vehicle department profits,” Webb noted.
As for the new-car side, the SAAR was above 18 million in both September and October, Webb said, with the year-to-date SAAR at 17.3 million.
“The net impact of the new vehicle environment will likely remain benign relative to used vehicle residuals for the remainder of the year; but next year’s spring market may see a smaller bounce in wholesale pricing if a leveling, or declining, SAAR spurs additional incentive activity,” Webb said.
Staff writer Josh Hyatt contributed to this report.
*Note: Webb indicates that, "For this analysis, CarMax’s fiscal quarter was shifted forward one month to correspond with the other groups that report on a calendar year."