Used-Car Sales On the Rise; Monthly New-Car SAAR Expected to Hit 15.2M
As TrueCar.com predicts this month will achieve the highest SAAR for February of 2008, right before the recession, used sales totals are expected to reveal a spike, as well.
November used-car sales are estimated to come in at 2,685,944, up 3.8 percent from November 2011.
Though this marks a rise year-over-year, used numbers are down 11.7 percent from October 2012, according to TrueCar.
The ratio of new-to-used is estimated to be 1:3 for this month, the company predicts.
“We are seeing overall healthy sales and retail activity in November. I think part of it has to do with consumers feeling better about the economy, even though there is all this fear of a fiscal cliff,” said TrueCar senior analyst Jesse Toprak told Auto Remarketing when asked what has contributed to the rise in used-car sales.
“It seems it is not translating into car sales,” he added.
Toprak also noted that Hurricane Sandy is actually playing a part in the increase of used sales, as well.
“There also the effects of the aftermath of the storm, where it forces consumers to replace their vehicles. There are thousands of storm-damaged vehicles that have to be replaced. In fact, the first half of November saw lower sales because of the storm, but the second half really took off,” he said.
Toprak also explained trade-ins are playing a part in November’s pre-owned success.
“As new-vehicle sales rise, a lot of people trade in their used cars when they get a new car. And as people trade their cars in, the dealerships have more used cars to sell. That is a chain reaction that brings more activity to used dealerships.”
But will the high used-sales rate continue into 2013? It seems inventory shortages may still plague dealers.
“While the used-car sales rate in 2013 is going to be higher than this year, it is not going to see a significant increase. The reason for that is there is still going to be a supply constraint that has been experienced for the past three years and will still be a factor next year,” Toprak said.
“So, we are probably going to see single-digit increases in used-car sales compared to this year, but there simply won’t be enough cars available to see a double-digit increase,” Toprak said.
Highlighting another take on used-car sales this month, CNW Research is predicting an even bigger rise in sales, as the company stressed Superstorm Sandy pulled about 250,000 used sales out of the market in October, but many of those buyers have come “roaring” back this month.
CNW project this month’s used sales figure to come in at 3.04 million, which would represent a 17.6-percent jump from November of last year.
CNW president Spinella also gave three reasons why dealers’ used sales are projected to strengthen so much in November.
“Casual sales are suffering because dealers are becoming increasingly aggressive in selling used cars and are having vehicles shipped into the Northeast from as far away as California to meet the demand,” Spinella said.
“Second, many individuals who would sell their cars privately in the Northeast simply lost those cars to Superstorm Sandy and have nothing to sell or had other issues to contend with,” he continued.
“Third, dealers are offering some pretty good prices across the country for solid used vehicles as trade-ins to meet the demand,” Spinella went on to say.
New-Car Sales Edge Closer to Pre-Recession Numbers
As the used-car market continues to improve as inventory loosens and values rise, new-car sales seem to be enjoying a needed lift, as well.
In fact, TrueCar is predicting this month’s seasonally adjusted annualized rate to reach 15.2 million new-car sales, up from 13.5 million in November 2011 and up from 14.3 million in October of this year.
Breaking the numbers down further, this month’s new light vehicle sales in the U.S. (including fleet) is expected to be 1,120,088 units, up 12.7 percent from November 2011 and up 2.6 percent from October.
Furthermore, retail sales are up 13.1 percent compared to November 2011 and up 6.3 percent from October 2012
Fleet and rental sales are expected to make up 16.1 percent of total industry sales in November 2012
“November was a strong month for new car sales and the impact from hurricane Sandy helped to boost auto sales to its highest since February 2008,” said Toprak.
“Import automakers got the biggest lift due to some increased incentive spending building momentum heading into next year. We don’t expect any major impact on auto sales from the ongoing fiscal cliff discussions,” he concluded.