CARY, N.C. -

Certified pre-owned sales took major tumbles on both year-over-year and month-over-month bases in November, but that shouldn’t cause alarm about the overall strength in CPO, according to Cox Automotive.

The 21% decline from November 2019 admittedly could be seen as “a big shock to the market,” but that slowdown was largely driven by last month having three fewer selling days than the year-ago period, says Kayla Reynolds, an economic industry intelligence analyst at Cox Automotive.

Moreover, the 20% decline from October is essentially a normalization following strong summer and autumn CPO sales, the company said in a Data Point report released Thursday.

During an interview earlier this week, Reynolds also points out that November is typically a weaker month for CPO, so the softness has to do with seasonality, along with supply/demand factors, “broader economic conditions” and “possibly a combined credit tightening.”

Getting into specifics, the Cox Automotive analysis of Motor Intelligence data indicates there were 186,861 CPO sales in November. That’s the lowest monthly sum since April.

However, certified remains one of the bright spots in auto retail. Reynolds said the company is maintaining its forecast for 2.6 million CPO sales. That would break the streak of nine record years in a row, but it would still rank in the top five years ever for CPO, based on Auto Remarketing’s previous reporting of certified sales numbers.

“And then we do expect a rebound, a manageable rebound, in 2021 to 2.7 (million),” Reynolds said.

As far as the current month, Reynolds said the past five years have shown that December tends to be stronger than November, but not as robust as CPO sales in the spring and summer.

In terms of next year’s forecasted rebound in CPO, Reynolds is hopeful that lease return gains will provide an “assist” to dealers.

She also agrees that a greater emphasis by large dealer groups and automakers on the used-car side should help the market next, too.

"I think it will assist the market somewhat, especially because the used market is so important to the industry as a whole,” Reynolds said.

The used-car market is already much larger than the new-car side, and the industry is also balancing out some supply and demand, which has shifted some focus to used, Reynolds explained. She also expects auction prices to “normalize” in 2021, so that should help, as well.

For 2020, the year is expected to close with 36.3 million used-car sale overall, with used retail (sales from dealers) at 19.3 million, Reynolds said.

Next year, it is expected that the used total will climb to 39.3 million.

And CPO, she said, has helped the overall used-car market “not have as weak of a year as everybody would have expected.”

In fact, even though there has been an 8% dip in CPO sales year-to-date, it’s better than the estimated 9% to 10% decline in the overall used-car market, according to Cox Automotive.

Cox estimated there was a 10.3% year-over-year drop in used-car sales last month and a SAAR of 37.0 million units. In November 2019, the used-car SAAR was 39.7 million. In October, it was 38 million.