New Car Sales
Q1: Used Car Sales at nearly 10 years high, is this the year of used car sales?
There are three key takeaways for the first quarter of 2016 in regards to the major automakers and their sales reports.
- Fleet aka Commercial vehicle sales is up. This includes vehicle models such as RAM ProMaster, Ford F-150 Heavy Duty models, and the Chevy Express Cargo Van.
- Sedan sales are slightly down, while sports utility vehicle and truck sales are up.
- So far in 2016, used car sales have been dominant, nearly increasing by 8 percent from a year ago.
Since 2005, major automakers in North America have reported year-to-year growth in terms of total new vehicle units sold and grossed revenue. This lead up to last year, when the automotive industry hit the highest sales year across the board for new vehicles. But like any major market, there comes a point where it will stall out or even decline slightly.
Some believe that we might see new car sales decline slightly, but will be made up with increased used car and fleet sales as mentioned above.
Here are a few plausible reasons for used cars besting the new cars market so far this year:
- It is a presidential election year, and this has proven to always be a test for the market, not just for the automotive industry, but for any industry.
- As Urse Chrysler states, there is an increase in the number of lease deals expiring so far this year from 2 or 3 years prior. This is leading those same car buyers to purchase their vehicle as a used vehicle once that lease has expired.
- Lastly, the new car market has just hit its peak. This isn’t claiming the automotive industry will now begin a steady or steep decline, it just means besting 2015 new car sales may prove difficult for 2016 and for the foreseeable future.
Ultimately for many car dealerships who rely heavily upon used car sales, this is proving to be a blessing. Edmunds analysts are reporting that they expect used car sales to eclipse over 40 million units by years’ end, putting it at the highest mark in quite some time. If this switch between new and used shows us anything, it just shows us that the automotive industry has bounced back in a very big way.