CNW: April Used Sales Predicted to Spike by Double Digits

Along with some survey discussion about brand appeal and what technology consumers want in their vehicles nowadays, CNW Research expects the April used-vehicle sales total to jump 10 percent.

President Art Spinella also predicted retail prices should edge upward because of short supply.

Overall, CNW thinks April’s used-vehicle sales total could reach 3.6 million. The figure for the same month a year ago was 3.286 million.

In his monthly industry briefing, Spinella noted franchised dealers are already showing nearly an 8-percent increase in April used-vehicle sales. He thinks that gain could come in higher as the month progresses with fresh trade-ins.

Meanwhile, CNW noticed that sales activity at independents dealers is up more than 15 percent this month.

The last segment that’s expected to push April used-vehicle sales up by double digits are private-party transactions, which CNW believes are ahead of the pace set in the same month a year ago by 6 percent.

Spinella pointed out that the bright April outlook comes after March that is typically a strong month for used sales at franchised dealers. Last month, CNW determined franchise dealers sold an average of 57 used vehicles per outlet, up 5.4 percent compared to the 54 units sold per outlet a year ago.

“March represented the best monthly unit number in at least four years,” declared Spinella, who added that the willingness of finance companies to provide loans to a deeper pool of potential buyers aided the gain.

Spinella offered more commentary about the trends by noting, "The industry is reaching the point where newer used cars are beginning to encroach on the price of new cars.”

The CNW president believes this situation causes two effects. The condition creates a cap on how much higher retail used-vehicle prices can go and simultaneously it can diminish the need for new-vehicle incentives.

Whether it’s a franchise or independent store or a private-party transaction, CNW thinks online used-vehicle sales are on the way up, too.

CNW calculated that used-vehicle sales conducted online climbed nearly 10 percent in the first 10 days of April versus the full-month total for April of last year.

The firm determined better than 26 percent of all vehicles on the Internet are selling within a 45-day period.

“April should see about 71 percent of all used vehicles being offered on some Internet site,” Spinella surmised.

CNW Analyzes Used-Vehicle Supply Trends

After discussing retail sales forecasts, CNW moved over to how used-vehicle supply levels are behaving.

“As the used-car market continues to heat up, the number of vehicles available for sale edges down,” Spinella began.

CNW indicated early April data suggests that for the full month, days’ supply of used vehicles will fall to 47.55 days compared with 48.27 days in March and 51.6 days in April of last year.

“While historically the ideal supply was measured around 45 days, the reality is most used-car outlets — either franchised or independent — need 55-plus to provide the selection customers require,” Spinella explained.

“In normal conditions, 47 days would be only a minor strain, but with consumers quickly shifting desire to high-mileage passenger cars, dealers are finding their supply seriously strained,” he continued.