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Analysis from July Sales Day Call

2 factors perhaps driving rise in used-vehicle sales

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Article Highlights

  1. The retail used-vehicle market is likely benefitting — at the moment, at least — from pulling over and pulling ahead.
  2. That is to say, a value proposition that is pulling would-be buyers of traditional cars in the new market over to the used market; and the specter of proposed automotive tariffs that may be leading dealers to buy used inventory ahead of such measures going into effect.
  3. The used-vehicle sales growth is amid what Cox Automotive senior economist Charlie Chesbrough described as a “huge reduction in the car segment” in the new-vehicle sales market during July.

The retail used-vehicle market is likely benefitting — at the moment, at least — from pulling over and pulling ahead.

That is to say, a value proposition that is pulling would-be buyers of traditional cars in the new market over to the used market; and the specter of proposed automotive tariffs that may be leading dealers to buy used inventory ahead of such measures going into effect.

Analysts with Cox Automotive posited those theories during a sales day conference call with reporters earlier this week.

Used a better buy than new, for some
Wednesday’s call came right after a month where used-car sales were expected to reach 3.4 million, according to a late July forecast from Edmunds, a sum that would beat June used-car sales of 3.2 million units. That would also translate to a used-car seasonally adjusted annualized rate of 39.5 million units, compared to the used-car SAAR of 39.2 million a month before.

The used-vehicle sales growth is amid what Cox Automotive senior economist Charlie Chesbrough described as a “huge reduction in the car segment” in the new-vehicle sales market during July.

“[Sales for traditional cars were] down quite a bit on a year-over-year basis, and certainly more than what we were initially expecting. And we think one of the things that might be going on is that car buyers are moving into the used-vehicle market,” Chesbrough said during the call.

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