Driving past a car lot, you’ve probably noticed that it’s becoming more common to see fewer used vehicles dotting the lot. Despite decreased supply, amid the wariness created by the COVID pandemic, used-vehicles are in higher demand than ever before according to the recent monthly Used Vehicle Market Report from Cox Automotive. Read on for more insight into this interesting trend!
1. Car Sales Ignite Despite Dwindling Used-Vehicle Supply
The car sales industry has seen an unexpected boost in the last few months, with current figures showing a healthy surge. Although the depressed state of the used car market could be a potential concern, the strong sales of new cars are mitigating those worries.
The drop in vehicle supply in the used-car sector is being felt throughout the industry, yet lucrative incentives and offers are impacting on the new car sale marketplace. Thanks to a vast range of pattern-shifting options, car sales have really driven off, with:
- Multiple financing plans, from buy-now-pay-later models to prepaid payments, giving customers the freedom to purchase a car in whatever way they feel comfortable
- Unrivaled discounts, including cashback options, free insurance fitting, and exclusive trade-in deals
- Smoothing process, products such as vehicle warrantees, breakdown covers and accessories have made the process for buying a car an incredibly easy and stress-free journey
Ultimately, the car sales industry is rapidly adapting to the new purchasing landscape, ensuring that new cars are still a viable option despite the dwindling used-car industry.
2. Cox Automotive Reports Significant Drop in Used-Car Inventory
Cox Automotive has just reported that used-car inventory in the United States is down 14% from last year. This has far-reaching implications for the auto industry and automotive consumers alike.
Demand for used vehicles has skyrocketed since the start of the pandemic, outstripping the pace at which dealers can obtain new inventory. While this provides an incredible opportunity for sellers, it has resulted in a game of musical chairs – in which there are few chairs available and a large number of potential buyers. Consequently, inventory availability has been challenged, with fewer vehicles available than in past years.
- Choice: The lack of used cars on the market reduces consumer choice and increases the price of the available used cars.
- Supply: Due to various lockdowns across the country, some automakers have experienced a decrease in production which has contributed to the current reduced supply.
- Demand: Consumers have been quick to return to the market as shelter-in-place orders have been lifted, putting a strain on inventory.
3. Market Reacts Positively to Shortage of Used Cars
The shortage of used cars has been a welcomed surprise as far as the market is concerned. Growing demand for second-hand automobiles has resulted in a major pricing advantage for consumers. Inflation of used car prices has slowed dramatically and is now stable. This is great news for those looking to buy a car earlier this year.
As the cost of owning a car decreases, all the related services that come with it benefit as well. Increasing demand for car-related services, such as repairs, servicing, and parts, is giving a boost to many major and small businesses. Dealerships too, are feeling the effect of the positive change in the market as customers focus on purchasing second-hand cars to mitigate the costs.
- Inflation of used car prices has slowed dramatically and is now stable
- Increasing demand for car-related services, such as repairs, servicing, and parts, is giving a boost to many major and small businesses
- Dealerships too, are feeling the effect of the positive change in the market as customers focus on purchasing second-hand cars to mitigate the costs
4. Unlocking Untapped Potential of Pre-Owned Vehicle Market
The used car market has immense potential that is often overlooked and underutilized. Every second hand vehicle comes with a unique history and provides an opportunity for businesses, customers, and the environment to benefit.
By recognizing and harnessing the potential of pre-owned vehicles, we can tap into a plethora of value:
Environmental Conservation: Second-hand vehicle sales often help reduce the need for new vehicle production. This helps to keep resources from being overused and reduces the pollution that would accompany new vehicle production.Affordable Solutions: Pre-owned vehicles offer an affordable solution to consumers who are looking to purchase a car. With a variety of models, conditions, and prices to choose from, customers are sure to locate the perfect match for their budget.Cost Savings: Businesses can enjoy substantial cost savings by procuring pre-owned vehicles. From large fleets to everyday households, pre-owned vehicles can provide money-saving benefits.
By unlocking the potential of the pre-owned vehicle market, everyone stands to benefit. By tapping into this market, we can help create a more sustainable future.
As used-vehicle supplies dwindle and demand rises, it is evident that the automotive industry is headed for an auspicious period of growth. With the combination of dealerships daring to restock inventory with used-vehicles, and consumers ready to buy them, Cox Automotive has set the tempo for an invigorating era in the motor industry.
