Used-car sales down from August, but maintain strength
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CARY, N.C. –
Used-car retail sales this month are expected to slide a bit from August, but the seasonally adjusted annualized rate remains near 40 million units, as pre-owned cars represent an attractive option for many consumers.
Edmunds is forecasting used-car sales of 3.3 million for September, which would be down from 3.4 million in August. The resulting SAAR would be 39.6 million, down from 39.7 million a month ago, the firm said.
But, again, the used-car market is still strong. So much so that Cox Automotive pointed to it as a challenge for the new-car side, in light of “years of aggressive leasing,” the company said in a news release this week.
“Millions of gently used, high-content vehicles have been returning to dealer lots. Off-lease vehicle volume is expected to peak in 2019, and many potential new-vehicle buyers will be drawn to this value alternative,” Cox Automotive analysts said in the analysis.
They later added this nugget on off-lease units: “These gently-used vehicles, selling at a 30-50 percent discount to their new versions, are a real threat to stronger new-vehicle sales volumes.”
Over at J.D. Power Valuation Services, senior automotive analyst David Paris said in an analysis that the used-car market now has an “extremely transparent” buying experience and is quite “competitive.” Given that, he said: “Dealers and other industry stakeholders need to keep on top of the pricing trends.”
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As for the large dealer groups, Paris said many are benefiting from strong used-car operations.
“Penske, Group 1 and Sonic have indicated in their second quarter reports that they have driven up used-vehicle sales by double digits — between 10 and 17 percent,” Paris said in the analysis. “All of these groups credit their used-vehicle operations for contributing to higher overall profits for the quarter.”
Used-car retailer CarMax reported earnings on Wednesday for its fiscal second quarter ending Aug. 31. Its total used unit sales were up 5.8 percent year-over-year during the quarter, with used sales in comparable stores up 2.1 percent.
Fiscal year-to-date, total used sales are up 3.7 percent.
