NADA on Used Sales: ‘Spring Effect is Real’
The “spring effect” is in full effect, and the used-car market continues to churn out high numbers.
With close to 3.6 million used-vehicle sales in April, there have now been nearly 10 million used cars sold so far this year, according to the National Automobile Dealers Association.
The April used-car sales total represented a 5.3-percent year-over-year gain, while year-to-date sales (which NADA measured as just over 9.98 million through four months) have dipped 1.3 percent.
Breaking down that April monthly sales figure, NADA said franchised dealers moved 1.34 million used cars in April, beating the March figure by 39.4 percent. There were 1.18 million used vehicles sold by independents, which beat prior-month numbers by 36.7 percent.
Meanwhile, there were 1.07 million private-party sales, beating the March figure by 45.2 percent.
“The used-vehicle market, like the new-vehicle market, remains strong,” said Steven Szakaly, chief economist of the National Automobile Dealers Association.
“The same factors that are boosting new-car sales are also increasing used-car sales,” Szakaly said. “Low finance rates, low gasoline prices and improving economic conditions are driving demand for used vehicles.”
Seasonally adjusted, NADA pinpointed the April used sales figure at 3.22 million units, an 8.9-percent sequential lift.
“The spring effect is real. For the last three years, we have seen sales pick up significantly in April,” Szakaly added. “Whether it’s the warmer weather or an improving selection of vehicles, April is typically a strong sales month.”
Manheim chief economist Tom Webb observed as much in the Manheim Used Vehicle Value Index report.
Following the 23rd straight quarter that the seven publicly traded dealership groups increased their same-store used unit retail sales, April remained robust for the used-car market, Webb said in the report.
“All indications are that the healthy sales environment continued in April. We know for certain that was true for CPO sales, which were up 11.3 percent in April and 11.4 percent year to date,” Webb said.
“Dealers selling lower-priced units were hampered by a less-than-stellar tax refund season. Despite an uptick in the third week of April, total tax refunds received through April 24 were down 1.1 percent, or $2.9 billion, from a year ago,” he added.
Going back to Webb’s point on the public retailers, their first-quarter same-store used unit retail sales climbed 6.7 percent, he noted. Additionally, the seven publics had a slight dip in gross margins, but achieved record high net profits.