Despite somewhat soft finish, used-car sales better than expected in 2023
When your favorite college basketball team wins an ugly game against an in-state rival, you may not love the bumps and bruises it took to get there, but you’re certainly happy with the outcome.
Same goes for the used-car market, it seems.
Despite a slowdown from the prior month and the heights reached in the summer, used-car sales in December capped what ended up being a pretty solid year, according to Cox Automotive.
One where expectations for used-car sales were exceeded, the company said in an analysis Tuesday. Considering the volatility over the past four years, that’s a “W” on the win-loss record.
“Overall, December used sales were a little soft when we think about the sales momentum we had since the summer, including lower prices all year,” Cox Automotive senior manager of economic and industry insights Chris Frey said in the report.
“Regardless of the December figures, we have to cheer the way the year ended, with the SAAR up from November and finishing above our full year January 2023 SAAR forecast,” Frey said.
Here’s the stat sheet.
There were an estimated 2.6 million overall used vehicles sold in December, Cox estimated, citing vehicle registration data.
That beat prior-year figures by 2.1%.
Looking at what Cox considers used retail sales (vehicles sold by dealers), there were close to 1.4 million sales in December, a 2.6% year-over-year increase.
Both overall and retail numbers, however, were down month-over-month. In fact, used-car sales (overall and retail) fell sequentially in both November and December.
Still, the seasonally adjusted annual rate for overall used-car sales came in at estimated 37.0 million in December, up from 35.6 million in November and 35.2 million in December 2022, according to the Cox data set.
The retail used-car SAAR was an estimated 19.6 million in December, compared to 18.9 million in November and 18.6 million a year earlier.
For full-year 2023, there were nearly 35.9 million overall used-car sales, Cox estimated. While that’s down from 36.3 million in 2022, it would beat the initial forecast for used sales. Cox estimates that there were 19.0 million retail used-car sales in 2023.
Looking ahead, the company anticipates 36.2 million overall used-car sales in 2024 and 19.2 million used retail sales. Both would be improvements from 2023, despite lingering supply challenges.
“The used-vehicle market is expected to regain some normalcy and balance in 2024,” Frey said. “However, the effects of lower new-vehicle sales in 2021 and 2022 are anticipated to keep the used supply constrained.”