May Transaction Prices for Used Vehicles Drop 5.2 percent, CNW Reports
Used-car buyers are leaving their markets in greater numbers to locate the vehicles they want and at the right price. In May, CNW spotted a 32.6 percent increase in the number of used vehicles acquired outside of the buyer’s DMS.
BANDON, Ore. — CNW Research reported today that used-vehicle sales at used-car dealers and through private party transactions increased 1.9 percent in May vs. a year ago, with sales totaling more than 4.39 million units.
Total value of used cars sold at used-car dealerships and through private party sales slipped 3.4 percent from a year ago to $39.2 billion, which the market research firm attributed to lower transaction prices. Transaction prices across all three channels, including used-vehicle sales at franchised dealerships, fell 5.2 percent from a year ago to $8,924 (excluding aftermarket products, taxes, fees, etc.), according to the market research firm.
“With inventories of one- to five-year-old cars improving due to off-lease and corporate returns, May sales of those vehicles rose compared to last year,” CNW’s Art Spinella noted.
Sales of one-year-old cars rose 3.5 percent vs. a year ago, while sales of two-year-old cars increased 9.6 percent. Sales of three-, four- and five-year-old cars were up 7.9, 7 and 2.5 percent, respectively.
“We saw a 1.52 percent decline in the number of used-car shoppers in May 2013 vs. May 2012, but closing ratios were up 4.8 percent, offsetting fewer ‘lookers,’” Spinella noted.
The number of used-vehicle shoppers visiting franchised dealerships inched up 0.5 percent, while shoppers visiting independent lots decreased 18.3 percent. Private party shoppers, however, increased 17.2 percent. Overall, there were 2.87 shoppers to actual buyers vs. 2.97 a year ago.
Additionally, the typical used-car buyer searched for a vehicle four weeks before acquisition, CNW found, down 3.8 percent from last year’s 4.2 weeks. The market research firm also spotted an 11 percent decline in the number of buyers who had a pre-approved auto loan when making an acquisition.
CNW also noted that the number of subprime buyers jumped 23.3 percent from a year ago to 1.1 million, while the number of deep subprime buyers increased 29.1 percent vs. a year ago.
“Shoppers are leaving their neighborhood in a continuing trend to make a used-vehicle purchase outside their local dealerships’ marketing area,” Spinella noted. “CNW saw a 32.6 percent rise in the number of used vehicles acquired outside of the buyer’s DMA (marketing area). Price and availability of a particular make and model were the two primary reasons.”
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