The “brisk” used-car sales at dealer lots this year are ahead of an “already healthy 2012,” according to a presentation from ADESA’s Tom Kontos. And based on the findings the Federal Reserve’s Beige Book report, things could be getting even better.

Kontos — the executive vice president and chief economist for ADESA Analytical Services — said in the latest Pulse findings that used-vehicle sales through July are up 3.5 percent for franchised dealers and 2.4 percent for independents.

What’s more, he added, citing data from the National Automobile Dealers Association, dealers are pulling in gross profits on their used sales that are higher than pre-recession levels, albeit on higher-priced units.

On the new-car side, there have been significant strides, as well. Through July, sales are up 8.4 percent, Kontos indicated in the report. During a presentation at the National Auto Auction Association Convention, he emphasized that these new-car achievements are being made via pent-up demand instead of incentive overload, which is a good development for the business.

Kontos reminded NAAA attendees that both the nature and the level of new-car incentives are more manageable and less detrimental to residual values that they have been in the past.

Looking forward to what may be in store, sales-wise, for the rest of the year, the Fed said in the Beige Book report released last week that the stretch of 2013 appears bright.

“Reports from dealerships across the nation were optimistic about demand growth for new and used automobiles for the remainder of the year,” the Beige Book analysis indicated.

Even further down the road, a report from NADA has the next year-and-a-half moving upward for used-vehicle sales, with next year potentially showing the most growth experienced in nearly a decade.

“The core drivers of used-vehicle demand will undoubtedly experience bumps in the road over the next 18 months, but directional movement will be positive,” NADA said in this report. “In fact, many economists believe 2014 will wrap up as the best year of growth since 2005.

“As we’ve discussed, a stronger economy and appealing new vehicle incentives will continue to promote a shift in consumer preference from used vehicles to new ones, and later-model prices will suffer as a result,” it continued.

“However, improving financial conditions will also support demand among pre-owned buyers looking to replace their current used vehicle with a newer pre-owned one — a growing percentage of whom will turn to manufacturers’ certified pre-owned programs — and the rise in incentive spending is expected to be mild.”
 

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.