BANDON, Ore. — Weighed down by a significant decline in private-party sales, used-vehicle sales are expected to drop 3.7 percent in September, according to CNW Research.
The market research firm said that the government-funded Cash for Clunkers program, which took millions of used vehicles off the road last year, continues to impact used-vehicle sales. The program also continues to skew year-over-year comparisons of new- and used-vehicle sales.
“Pushed by a deep recession, a significant number of families were trying to rid themselves of excess vehicles and selling them for whatever they could get,” wrote Art Spinella in CNW’s September Retail Automotive Summary. “That post-C4C is impacting this year’s numbers.”
CNW estimates that private-party sales will be down 16.4 percent (940,000 units) in September compared to the year-ago period. However, franchised sales will be up 3.6 percent (1.07 million units), while independent sales are expected to increase 2.3 percent (1.13 million units).
Total used-vehicle sales are expected to be off 3.7 percent (3.15 million units) for the month. However, on a year-to-date basis, sales are expected to be up 3.7 percent (26 million units). “If that trend holds for the rest of the year, the industry will find it tough to top 38 million unit sales or only slightly better than 2008,” Spinella wrote.
Consumers who are concerned about the economy have also pulled back their intentions to buy. This was illustrated in CNW’s “Pent-Up Demand” data, which tracks the length of time out-of-market, used-car shoppers intend to delay their next purchase. Pent-up demand in August stood at 3.64 months, up from July’s 3.16 months and May’s 2.76 months.
Asking and transaction prices are expected to remain firm in September. Franchised dealers are asking for 2.6 percent more for their vehicles and getting 0.93 percent more compared to the year-ago period. Independent dealers are asking for 5 percent more and are receiving 1.85 percent more. Both segments are showing slightly higher transaction prices as well.