May’s soft certified pre-owned vehicle sales performance may be more than just a speed bump. The CPO market is likely headed to its softest year in close to a decade

Following four consecutive month-over-month gains to start 2022 on a high note, the 208,423 CPO sales in May marked a 7% decrease from April and more than a 22% year-over-year decrease, according to a Cox Automotive analysis of Motor Intelligence data.

Through five months, certified sales have fallen 17.5.% from the same period of 2021, Cox said, and are expected to close the year with the lowest annual sales total since 2013.

Cox Automotive senior manager of economic and industry insights Chris Frey said in the analysis that the double-digit year-to-date drop in CPO sales isn’t a surprise, given market dynamics, and explained why the company isn’t as bullish on 2022 total sales.

“Earlier this year, we made a downward revision in our CPO sales forecast, as we expected dealers to have lower CPO inventory, as many newer-model used vehicles — vehicles that are often candidates for a CPO program — are being bought up by rental car companies, or simply not being sold through a CPO program while values remain high,” Frey said in the analysis.

“Currently, CPO sales are on track to finish near 2.3 million in 2022, down nearly 18% from last year’s 2.7 million.”

Based on Auto Remarketing’s prior reporting on Autodata Corp./Motor Intelligence data, that would mark the softest year for CPO since 2013, when there were 2.11 million sales. A year later, there were 2.34 million. Both were records at the time and part of a nine-year run of all-time highs for CPO.

Looking at the overall used-car market, Cox Automotive pointed to Dealertrack data based on a same-store set of dealerships that estimates that used retail sales in May were off 1% month-over-month (which is typical given the end of tax season) and fell 7% year-over-year.

In a bit of good news, the latter represented the slowest year-over-year decline through five months of 2022, the company said.