Those used vehicles on your front line and highlighted on your store website — especially certified pre-owned models — are going to look even more appealing if a new report from Edmunds is any indication.
Edmunds projected on Wednesday that used-vehicle sales in 2019 are poised to hit the highest level since the recession. In 2018, analysts said 40.2 million used vehicles were sold in the U.S. In 2019, Edmunds is predicting used-vehicle sales could approach 41 million.
Edmunds experts explained that rising vehicle prices and high interest rates are pushing buyers out of the new market, and a record number of lease returns this year will give shoppers more options than ever in the used market.
“Typically, sales of new and used vehicles follow the same pattern — if sales of new vehicles rise or fall, so do sales of used vehicles, and vice versa,” Edmunds senior manager of industry analysis Ivan Drury said in a news release.
“But now we’re seeing new-vehicle sales fall while used rise, indicating the market has reached a flash point,” Drury continued. “New cars are getting so expensive that they’re out of reach for many car shoppers, but there are so many more affordable used vehicles coming off lease that the market is naturally shifting in that direction.”
Edmunds data showed that in 2013, the price gap between new and 3-year-old used vehicles was 56 percent, amounting to more than $11,000 in savings on average. In 2018, that number grew to 62 percent, totaling nearly $14,000 in savings on average.
Edmunds data also revealed that interest rates on new-vehicle financing jumped by 17 percent in 2018, whereas rates for used vehicles have risen at a slower clip, with interest rates increasing by 9 percent in the same period.
Edmunds experts added that these market conditions have never been more favorable for certified pre-owned vehicles, but there’s an opportunity for automakers to better educate vehicle shoppers on the benefits of these programs.
According to Google Trends data, relative search interest for CPO vehicles has steadily increased over the last five years, but the top pages viewed on Edmunds for shoppers of CPO vehicles are “What Are Certified Pre-Owned Vehicles?” and “Certified Pre-Owned Cars Vs. Used Cars With Extended Warranties.”
“Many shoppers are unaware of the benefits of CPO vehicle programs, but given the tough financial conditions in the new market, it’s never been a better time to look into them,” Drury said.
“Between more affordable prices, the assurance of an automaker warranty, and lower interest rates, CPO vehicles give car shoppers a way to enjoy many of the benefits of a new car and minimize many of the risks of buying a used car,” he went on to say.
|Luxury Subcompact Car||$8,568||$13,606||59%|
|Luxury Compact Car||$15,079||$19,509||29%|
|Luxury Midsize Car||$19,755||$25,991||32%|
|Luxury Large Car||$35,547||$45,486||28%|
|Luxury Sports Car||$33,392||$37,374||12%|
|Luxury Subcompact SUV||N/A||$15,252||N/A|
|Luxury Compact SUV||$16,141||$18,967||18%|
|Luxury Midsize SUV||$19,711||$22,318||13%|
|Luxury Large SUV||$36,049||$41,536||15%|