Used Car Retail Market Becoming The Place To Buy “New”

Summary

• Retail used and CPO vehicles are seeing surges in sales numbers due to tumbling prices
• 1.13 million used vehicles were moved via dealerships and retail used lots in January, with 1.29 million used vehicles moving in February
• The trend towards used vehicles has created a cyclical effect where dealerships are offering more for used vehicles to entice consumers to sell
• CPO vehicles from short term leases are also creating a strong market, especially for those looking for “new” cars with partial or extended warranties
• We think that the effect of pricing dynamics and trends in the used market is a win/win for the consumer
• We also think that this is why traditional advertisements for major brands have included many more used vehicles in recent months over new cars

The automotive industry is witnessing a notable surge in the sales of used cars and certified pre-owned (CPO) vehicles across the first two months of 2024, a somewhat surprising trend in a time of the year when purchasing behavior is usually aimed towards new vehicles.

This surge, primarily attributed to falling prices in the used car market, has led to a widening price gap between new and used vehicles. This, in turn, has significantly influenced purchasing behavior across almost all types of vehicles, from compact to full size SUVs and heavy duty trucks.