Used-car retail sales in April were ahead of prior-year figures, but the market was challenged, given the end of tax season and the hurdles of low supply, affordability and high interest rates.

And that’s to be expected, says Cox Automotive.

The company said in a Data Point report last week that independent and franchised dealers combined to sell 1.45 million used vehicles last month, which beat April 2023 by 4.8% but was a 7.0% month-over-month decrease.  The sales estimate is based on Cox Automotive’s vAuto Live Market view data.

What’s more, the past five Aprils have had average sales volumes of 1.56 million, Cox said.

Through four months of the year, there have been 5.72 million used-car sales by dealers, compared to 5.63 million through April 2023.

“As tax refund season winds down, it’s normal to see consumer demand for used vehicles back off in April, and that’s what we experienced this year as well,” Jeremy Robb, who is Cox Automotive’s senior director of economic and industry insights, said in a news release. “With interest rates remaining elevated, consumers need a bit more of a push to buy at this time of year.

“While prices were lower against 2023, it was enough to attract more buyers from the sidelines at this point,” Robb said. “Used retail sales were higher against last year’s levels, but tight inventory and affordability issues continue to be a challenge for the industry.”

CPO sales sluggish

The certified pre-owned segment of used-car retail was also a challenge.

Cox estimates there were 209,265 CPO sales in April, which is down from 214,684 certified sales in April 2023 and 231,927 CPO sales in March. That represents a month-over-month decline of 9.8% and a year-over-year slowdown of 2.5%.

Through four months, year-to-date CPO sales are up 0.2%, Cox said.

Used-car supply trends

Cox provided further details on the used-car supply picture in a separate Data Point report Friday.

As of May 2, there were 2.27 million used vehicles on dealership lots, which beat prior-year figures by 6%. It also beats the 2.22 million at the beginning of April.

Days’ supply of used vehicles was at 46 at the beginning of May, compared with 45 to begin April and even with year-ago figures, Cox said.

And while used-vehicle prices have trended downward this year, the lowest-priced vehicles are the hardest to find, the company said in the report.

“Used cars below $15,000 continue to show constrained availability with only 36 days’ supply, 22% less than all other price ranges. Affordability remains challenging for consumers, and supply is more constrained at lower price points,” Cox said.

Vehicles are also turning more quickly. In its Market Insights report released Tuesday, Black Book said retail used vehicles are currently turning in about 40 days. Earlier this year and late last year, used-car turn rates had eclipsed the 60-day mark at certain points, the data shows.