MORRISVILLE, N.C. -

The certified pre-owned vehicle market is on the cusp of a decade run of record sales.

With 2.8 million CPO vehicles sold, 2019 was the ninth straight year of best-ever certified sales, according to a CAMIO report from Cox Automotive this week.

It was also a 4% hike from the prior year.

But will 2020 make it 10 straight years of record certified sales?

Potentially.

Cox Automotive is forecasting 2.80 million CPO sales, which would be even with 2019.

Edmunds, however, said in its 2020 Automotive Industry Trends Report that it is forecasting 2.81 million certified sales. That would beat what Edmunds said were 2.78 million CPO sales in 2019 and represent a new best-ever sum.

Another banner year for CPO in 2020 is likely to occur amid a heavy off-lease market, giving dealers inventory ripe for providing “an affordable option for shoppers priced out of the new market,” Edmunds said in a news release.

There were 4.1 million off-lease vehicles in 2019, according to Cox Automotive, which said this was the “last big year of growth” for lease returns.

However, Cox is still anticipating 4.1 million off-lease vehicles for 2020, many of which have the same or similar tech amenities as new vehicles and will be offered at a much lower cost to the consumer.  

Lease return volumes should remain a strong driver of what Cox described as “higher-priced ‘gently used’ vehicles” as well as CPO sales.

“These are very competitive products that are going to be coming back to dealerships around the country, where I’m selling very similar high-contented vehicles at a 30, 40, 50% discount to the brand-new counterpart that’s in the market today,” Cox Automotive senior economist Charlie Chesbrough said at the company’s 2020 Industry Insights Breakfast earlier this week, a recording of which is available here. “Again, a real threat for the industry as consumers might be looking for ways to save money.”

Later-model used vehicles give consumers a way to save money, but still get some of the tech perks found in new cars. 

Some of the more popular vehicle technologies like Bluetooth, backup cameras and blind-spot monitors can likely be found in certified vehicles, which are often  just a few years old, Cox said. Many of the off-lease vehicles now are in highly desirable SUV and crossover segments, giving CPO programs ample choice to meet consumer demand, the company said.

And while this year could be the crest in the off-lease wave, it is important to note that annual leasing volumes have remained at 4 million units or higher each year since 2015, according to the Edmunds report, with lease penetration at 30% or higher each year since 2016.

Theoretically, those vehicles are still hitting the used market in coming years. 

Meantime, the gap between the average transaction price of a 3-year-old vehicle and that of a new vehicle has climbed from $10,449 in the third quarter of 2010 to $14,951 in Q3 of last year, according to Edmunds.

“Prices are shooting up because shoppers are opting for pricey SUVs and trucks packed with more high-tech options than ever before,” Jessica Caldwell, who is executive director of industry insights at Edmunds, said in a news release.

“These increased costs, combined with the discontinuation of more affordable options like domestic passenger cars, could prompt shoppers to shift their focus to the used market — or delay their purchase altogether,” she said.

Incentives in the new-car market were at an all-time high last year, according to Cox Automotive Rates & Incentives. And this year, those incentive could be a “headwind” for certified sales, Cox said. Still, the CPO market is expected to see nice tailwinds from the one-two punch of high supply and demand.

As for 2019, the year closed with CPO sales reaching 235,921 units in December, which was a 5% year-over-year gain, according to Cox, citing Motor Intelligence.

Sharing full-year numbers with data from Motor Intelligence, Cox said Toyota had the greatest share of the CPO market in 2019 at 13.8%. Honda was next at 10.2%, followed by Chevrolet (7.9%), Nissan (7.7%) and Ford (7.3%).