CNW: Used Sales Approach 6-Percent Hike; Franchised Dealers Hit Price Peak
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BANDON, Ore. –
The used-vehicle market is expected to climb more than 5 percent this month and eclipse 2.6 million sales, according to CNW Market Research, which has also found that used transaction prices for franchised dealers are the strongest they’ve been in a year.
Overall, CNW is projecting 2.64 million used sales this month, a 5.6-percent rise compared to a used market of just less than 2.5 million sales a year ago.
The biggest gains for March are likely to be in the private-party arena, which is predicted to increase 23.7 percent year-over-year at 860,000 units sold.
Franchised dealers are projected to pull in 905,000 used sales (up 3.1 percent year-over-year), and independents will likely move 875,000 units (down 5.5 percent).
As for the hike in casual sales, CNW president Art Spinella noted: “A willingness on the part of financial institutions to loan money on private-party transactions is the overriding reason, CNW research shows. Also, the availability of free advertising through the likes of craigslist.com helps.”
He continued: “That said, however, for those looking to sell a vehicle quickly, online selling may be disappointing. It takes an average of 10-plus weeks to sell a vehicle using a free online venue versus less than seven weeks for paid online websites such as AutoTrader.com.”
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Looking at transaction prices, franchised dealers are at $11,254 for March, up 4.8 percent year-over-year and 1.47 percent month-over-month. Independents are averaging $9,874 in transaction prices for a 9.03-percent hike from March 2011 and a 0.92-percent uptick from February.
Declining Pent-Up Demand
Offering more analysis, CNW highlighted how pent-up demand in the used-car market appears to be dwindling again. Pent-up demand has dipped from 94,000 intenders in January to 83,500 in February, with expectations for a drop to 80,500 in March.
“Early data among used-car intenders show pent-up demand continues to shrink as more consumers switch from ‘intending to buy’ to actually making a used-car acquisition,” Spinella noted, pointing out that the amount of used-car pent-up demand is projected to be just 84 percent of where it was a year ago.
The average delay time has also dropped off, tracking at 2.31 months in March, compared to 2.96 a year ago.
