The share of total vehicle sales that used cars commanded in the first quarter marked a four-quarter high, according to Edmunds.com.
The company said in its latest Used Market Quarterly Report that used market share came in at 71.0 percent in Q1. While this trailed the year-ago share of 72.6 percent, it beat the fourth-quarter share of 68.0 percent as well as the second- and third-quarter levels from 2013.
In another area of its report, Edmunds specifically dialed in to the retail used sales at franchised dealers and broke down which segments had the strongest gains in used market share among these dealers.
Leading the list was entry luxury SUVs, whose share was up 10.8 percent, followed by mid-range luxury SUVs (up 10.5 percent). Compact crossover SUVs jumped 5.2 percent in share, midrange crossover SUVs increased 4.5 percent, and large crossover SUVs were up 3.8 percent.
“Luxury SUVs and crossover SUVs dominate the used-car market share increases this past quarter,” Edmunds said in the analysis accompanying the data.
Large truck share was up 1.3 percent and five segments were up less than 1 percent or saw no change.
The average change among all the segments was a downward movement of 0.9 percent. Twelve segments beat the industry average and nine fell below the average.
Consumers are turning toward the Big 3 this spring.
Domestic automakers dominated the list of top 10 most-researched used vehicles at NADAguides.com last month.
According to the latest issue of Guidelines from NADA Used Car Guide, the top 10 most-researched used models in April are as follows:
- Ford F-150
- Chevrolet Silverado 1500
- Dodge Ram 1500
- Ford Mustang
- Honda Accord Sdn
- Chevrolet Silverado 2500HD
- Toyota Camry
- BMW3 Series
- Ford Super Duty F-250
- Jeep Grand Cherokee
Although, domestic nameplates make up most of this list, import makes saw the biggest spikes in consumer activity for used models this past month, boding well for these brands in future months. And 10 brands saw spikes in consumer interest of over 40 percent. The breakdown for these top 10 brands in April, according to the Guidelines report, is as follows:
Kia: up 78 percent
Porsche: up 68 percent
Hyundai: up 64 percent
GMC: up 60 percent
Audi: up 49 percent
Nissan: up 47 percent
Mercedes-Benz: up 42 percent
Mazda: up 41 percent
Volkswagen: up 41 percent
MINI: up 41 percent
In an overall used-car market that was 3.65 percent stronger than the one in April 2013, sales of vehicles ages 1 to 5 were especially “hot” last month, according to CNW Research.
And likely not coincidentally, certified pre-owned sales jumped nearly 10 percent year-over-year in April, data from Autodata Corp. indicates.
CNW said there was a 9-percent gain in sales of 1- to 5-year-old used cars overall, which is close to the increased in CPO-specific sales noticed by Autodata.
There were 193,091 certified pre-owned sales in April, which is a 9.5-percent improvement over year-ago figures. Through the first four months of the year, dealers have sold 744,861 certified units, which beats the year-ago sum by 10.5 percent.
Asian automakers sold 91,027 CPO cars in April, which marked a 5.8-percent gain. Europeans moved 33,811 CPO units for a 12.1-percent upswing. The Big 3 posted 68,253 CPO sales for a 13.5-percent lift.
Overall Used Numbers
The number of used cars sold by franchised and independent dealers in April, plus those included in private-party sales, came out to 3.96 million last month, CNW said.
This compares to 3.82 million in April 2012. Through four months, there have been 11.44 million used vehicles sold, up from 11.26 million in the same period of 2013.
Franchised dealers sold 1.41 million used cars in April (up 4.7 percent), independents moved 1.28 million (up 3.95 percent) and casual sales increased 2.21 percent at 1.26 million.
CNW president Art Spinella gave some overarching analysis on April’s used-car market in his report released Friday.
“The Internet continues to drive traffic to used car sellers at the expense of newspapers,” he said. “In April, the number of shoppers went to a dealership because of something seen on the Internet jumped 116 percent versus a year ago and nearly 28 percent versus March of this year.
“Newspapers, on the other hand, saw a decline in the number of consumers who say they were driven to a dealership by print newspapers — down 16 percent versus a year ago.”
Spinella went on to note: “More consumers are shopping franchised dealerships for a used car or truck versus March of this year (up 46.5 percent), but off somewhat vs. year ago (down 4.5 percent). For independent dealers, the comparable percentage changes are up 22 percent (versus last month) and down 22 percent (versus last year).”
AutoNation reported that April’s sales performance in its new-vehicle department produced the best figure for the fourth month of a year since 2006.
The dealer group reported to automakers retail sales of 25,669 new vehicles in April, an increase of 14 percent year-over-year.
On a same-store basis, AutoNation generated 24,955 retail new-vehicle unit sales in April, representing an 11-percent jump compared to last April.
Last month’s reported retail new-vehicle unit sales for AutoNation's operating segments were as follows:
— 7,860 for domestic, up 4 percent versus last April
— 12,857 for import, up 18 percent versus last April
— 4,952 for premium luxury, up 22 percent versus last April.
AutoNation expects to announce May reported retail new-vehicle unit sales on June 4.
Lithia Motors took another step during the first quarter toward reaching its goal of turning 75 used vehicles a month at each of its stores.
The dealer group reported on Thursday that it retailed 16,316 used vehicles during Q1, representing a 19.4-percent lift year-over-year. Selling the extra 2,655 used vehicles above the year-ago quarter’s total of 13,661 units meant Lithia stores averaged 55 used sales per month.
While Lithia moved more used metal in Q1, the company watched its gross margins on those used deals soften by 110 basis points year-over-year. The group’s gross margin on used retail sales in the first quarter settled at 13.5 percent, down from 14.6 percent a year earlier.
Nonetheless, the used-department retail sales improvement helped Lithia post the highest first-quarter adjusted net income level in company history as increased adjusted net income from continuing operations climbed 24 percent above the prior-year period.
Lithia said its Q1 adjusted net income from continuing operations came in at $27.1 million, or $1.03 per diluted share. That’s up from $21.9 million, or $0.84 per diluted share during the first quarter of last year.
The company’s unadjusted net income from continuing operations for the first quarter was $24.7 million, or $0.94 per diluted share, compared to $21.9 million or $0.84 per diluted share for the first quarter of last year.
The company’s Q1 revenue increased $175 million or 19 percent to $1.1 billion, up from $903 million for the first quarter of 2013.
Lithia mentioned several other year-over-year improvement highlights, including:
—Total same-store sales increased 12 percent.
—New-vehicle same store sales increased 10 percent.
—Service, body and parts same store sales increased 9 percent.
—Same store F&I per unit increased $84 to $1,200.
—Adjusted SG&A expense as a percentage of gross profit decreased 60 basis points to 68.5 percent.
“We grew same store sales in all four business lines in the first quarter,” Lithia president and chief executive officer Bryan DeBoer said. “Notably, we saw a 9-percent increase in service, body and parts sales driven by an 8-percent improvement in customer pay work and a 17-percent increase in warranty activity.
“March was a solid month for national new car sales with a SAAR of 16.3 million, the highest level since November 2007,” DeBoer continued. “March was also the best month in our company’s history in both revenue and pre-tax profit. Our store leaders increased same store used unit volume 12 percent in the quarter as we continue our objective to sell 75 used units per store per month.
“We believe opportunities remain for continued improvement and are optimistic for 2014,” he went on to say.
Tax season evidently helped the used-vehicle sales market rebound nicely as the first quarter closed.
CNW Research reported monthly used-vehicle sales surpassed 3 million units for the first time this year as analysts computed the March figure came in at 3.088 million. That figure represents a gain of more than 50 percent from February’s sales amount, which was 2.055 million.
“And it wasn’t just in the franchised channel. Independents and casual sales also showed significant 50 percent increases versus February,” CNW president Art Spinella said.
CNW determined franchised dealerships sold more than 1 million used vehicles in a month for the first time in 2014 as these stores turned 1.096 million units. Sales at independent dealerships also topped the 1-million mark. Private party transactions settled just below that threshold as the firm put the total at 985,316.
During his quarterly conference call on Monday, Manheim chief economist Tom Webb praised the used-vehicle sales performance dealers enjoyed in March, touching on some of the reasons why he believes the retail side is healthy.
“Dealers are turning auction purchases quickly on their retail lots and they’re turning them efficiently,” Webb said. “As a result, profits are very, very strong. Why is that important? Because the competitive nature of the market means that dealers will keep on bidding on units up and to the point that their margins are reduced to the minimally acceptable level.
“I would say given the continued improvement in the labor market, and more importantly, a very favorable retail credit environment, I do not expect these market fundamentals to materially change in the months ahead,” he continued.
That credit seemed to be available as the amount of subprime buyers who made a used-vehicle purchase thanks to an influx of tax-refund cash significantly in March.
CNW indicated the number of subprime buyers in March rose 17 percent versus year ago and soared 57 percent above the February figure.
Meanwhile, the firm noted that sales to consumers with FICO scores below 550 spiked 51.6 percent month-over-month. Sales to those deep subprime buyers also jumped 11.8 percent in March versus the same month a year earlier.
All told, CNW said about 3 percent more units were financed in March versus a year ago.
As an industry on a year-over-year basis, CNW determined that used-vehicle climbed 2.7 percent with franchised dealer sales units up 1 percent, independent dealer sales up 4.8 percent and private party transactions gaining 2.55 percent.
“But the good news doesn’t stop there,” Spinella said. “Franchised transaction prices rose a healthy 10.8 percent on the back of growing certified pre-owned units.
“Independents also saw an increase in transaction prices but at a more modest 1.52 percent versus year ago while private party sucked a lot of newer (15-plus year old) models off the market and was able to make a 5 percent increase in transaction prices,” he continued.
Spinella pointed out that the used-vehicle industry generated these sales numbers with 13 percent fewer used shoppers searching lots versus year ago, “indicating the pent-up demand log jam may well be breaking.”
In a “promising” sign for dealers, about two-thirds of the participants in the latest dealer survey from KeyBanc Capital Markets said their used-vehicle gross profits per unit were up more than $50 year-over-year in February.
Only 17 percent saw their used gross profits per unit drop more than $50 per unit, and 17 percent showed static results.
Coupled with stronger F&I gross profits for most dealers, these results had KeyBanc calling the gross profit environment an auspicious one for dealers.
“Gross profit environment was promising in February as majority of our respondents indicated gross profit per unit in used and F&I increased more than $50 year over year, which should offset mixed results reported in new vehicles, and P&S gross margin was flat to up,” KeyBanc said in the report.
Here’s another good sign for the used-car business that KeyBanc illustrated: the majority of dealers were seeing their used sales increase last month.
In fact, 75 percent of responding dealers indicated increased used-vehicle sales. Breaking that down, most (58 percent) increased by as much as 5 percent, 8 percent were increasing from 5 percent to 10 percent, and 8 percent climbed more than 10 percent.
Meanwhile, 17 percent said their used sales were down more than 10 percent, and 8 percent said their used sales fell by up to 5 percent.
For more insight into the F&I side of KeyBanc’s analysis, see the story from SubPrime Auto Finance News here.
Last month was a challenging one for the used-car market, as total sales lagged 1.3 percent behind year-ago figures and fell more than 12 percent from January, according to CNW Research.
Overall, there was a combined 2.06 million used vehicles sold in February by franchised dealers, independent dealers and private parties. Franchised dealers sold 729,163 used vehicles last month, down from 747,543 in February 2013.
Independents had 684,053 used sales, which was down from 699,065 a year ago. There were 641,939 casual sales last month, up from 636,019 in February 2013.
“It was a tough month for most used-car dealers as well as private parties,” CNW president Art Spinella said in a recap of the month’s results.
In a bit of a silver lining, the value of used cars sold franchised dealers went up 6.1 percent year-over-year thanks to “a richer mix of inventory as well as a strong CPO market,” Spinella said.
“Independents weren't so fortunate, seeing the value of the vehicles sold falling 4.3 percent,” he added. “Private-party sales had a 12.65-percent increase in value of vehicle sold with a growing percentage of Asian models with higher retail pricing being offered.”
There were 15.13 percent fewer used-car shoppers last month than there were in February 2013. Compared to January, there were 16.5 percent fewer shoppers.
“In all, there were 2.3 shoppers for every buyer in February, down from 2.67 in January,” Spinella noted.
“Bad weather did deter many of those shoppers from searching outside of their marketing area for a used vehicle. The share of buyers who bought within their marketing area climbed 18 percent compared to February 2013.”
