Q2 average used retail prices approach $19K
Along with listing the top 10 states where used sales climbed most during the second quarter, the latest Used Vehicle Market Report compiled by Edmunds.com indicated that the average used-vehicle retail prices hit a record high in the second quarter.
Aided in part by certified pre-owned units, Edmunds' analysis showed retail prices came in at $18,800 in Q2, up 7.6 percent — or $1,300 per vehicle — from the second quarter of 2014.
Meanwhile, the average age of used cars sold in Q2 2015 was 4.5 years, down from an average of 4.9 years the same time last year.
While used-car managers might think the retail price record might stem solely from the CPO market because of a richer volume of younger, well-equipped units, Edmunds also highlighted in the report how the retail prices for some of the oldest vehicles potentially in dealer inventory are rising sharply. Take a look at what Edmunds uncovered when looking at the year-over-year rise for vehicles from the 2007 model-year and earlier:
— 8 years old: 11 percent
— 9 years old: 13 percent
— 10 years old: 11 percent
— 11 years old: 30 percent
— 12 years old: 30 percent
— 13 years old: 36 percent
— 14 years old: 48 percent
— 15 years old: 55 percent
“There is definitely a lot of demand for vehicles more than 10 years old,” Edmunds.com director of industry analysis Jessica Caldwell told Auto Remarketing during a phone conversation on Friday.
“They’re now at price points for people who just need that mode of transportation,” Caldwell continued. “They’re not looking for the latest and greatest in terms of in-car technology. They want something that can get them from A to B. There’s just a lot of demand in that segment.
“A lot of people in that market are looking for older trucks and SUVs, especially the old body style SUVs before the crossover craze happened,” she went on to say.
While the overall retail price reading is higher, Caldwell noted how stickers for CPO models are becoming more attractive for shoppers.
“Because there's a growing inventory of newer used cars, the prices on these vehicles seem to be more consumer-friendly than in the past," Caldwell said. “For example, 3-year old used cars have more bells and whistles than older used cars, and they’re actually selling for less than they did just one year ago.
“Compare that to vehicles age 8 and over, whose prices are up 11 percent or more, on average, over last year. There's undoubtedly a growing value proposition these days in newer used cars,” she went on to say.
Auto Remarketing will have more details from Edmunds’ report that focuses on the CPO market as well as Caldwell’s assessment of how valuable certified sales are to both franchised dealers as well as automakers in the next installment of CPO Weekly, which is delivered each Tuesday.
And for the opportunity to gather information face-to-face, dealers are encouraged to attend the CPO Forum, which is part of Used Car Week. The CPO Forum gathers together thought-leaders in the certified space that all aim to help stores move more CPO metal.
The CPO Forum begins Used Car Week, which runs from Nov. 16-20 at the Phoenician in Scottsdale, Ariz. More details are available at www.usedcarweek.biz.
Leading states for used sales
All told, Edmunds determined that more than 9.5 million used vehicles were sold during the second quarter of this year, a figure about 400,000 units higher year-over-year.
In the latest report, analysts highlighted the top 10 states that enjoyed the great lift during Q2. That group included:
1. Tennessee: up 34.8 percent
2. Maryland: up 20.8 percent
3. Virginia: up 12.5 percent
4. Utah: up 11.1 percent
5. New Hampshire: up 9.7 percent
6. Oregon: up 9.4
6. Rhode Island: up 9.4 percent
8. Florida: up 8.4 percent
8. Massachusetts: up 8.4 percent
10. Texas: up 7.3 percent
Meanwhile, Edmunds also spotted a quartet of states where used sales softened by double digits in Q2. Maine led the way with a 22.7-percent decrease, followed by Kansas (down 14.5 percent), Arkansas (down 11.1 percent) and New York (down 11.0 percent).