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Increasingly More Affordable Than New, Used Cars Become ‘Strongest Part of Market’

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Article Highlights

  1. “The strongest part of the market — from a retail sales perspective, it’s driving the finance growth, certainly driving the profitability of dealers, and very important to the franchise business, driving the CPO, and producing the strong vehicle values that are helping residuals and helping leasing be more attractive — is the strong used-vehicle market,” Jonathan Smoke, Cox Automotive chief economist, said.
  2. In particular, it’s an abundant supply of later-model vehicles that are becoming increasingly more affordable and attractive to buyers.
  3. Cox Automotive expects used-car sales to come in at 39.2 million this year, down a bit from the 39.4 million used sales in both 2017 and 2018. Further out, they’re expecting 39.0 million used-car sales in 2020.

Auto Remarketing, June 28, 2019 — Cox Automotive chief economist Jonathan Smoke emphasized that the statement he was about to make was “not a negative thing.”

Smoke and other Cox Automotive leaders were speaking to reporters and others gathered at the company’s Detroit-area offices on Wednesday, discussing Cox’s 2019 Mid-Year Review and Outlook report.

“The strongest part of the market — from a retail sales perspective, it’s driving the finance growth, certainly driving the profitability of dealers, and very important to the franchise business, driving the CPO, and producing the strong vehicle values that are helping residuals and helping leasing be more attractive — is the strong used-vehicle market,” Smoke said.

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