Used Vehicle Update: Volumes Fall in 2022 as Sourcing Improves Marginally |

Continuing to work with our friends and colleagues at the Used Car Dealers Association, DesRosiers Automotive Consultants once again reached out to the used vehicle retailer community. Over 400 UCDA members responded to our survey with both independent dealers and the used vehicle arms of franchised new vehicle dealers offering their perspectives on the used vehicle market in 2022 and in the months to come.

From a sales volume perspective, 2022 was not an easy year for used vehicle dealers with volume declines evident for both franchise and independent dealers. “Looking forward, many in the community are hopeful volumes will recover in light of improvements in supply alongside some moderate price declines” commented Andrew King, Managing Partner at DAC. He continued, “However whether the hopes for improved volumes will hold up in light of a weakening economy and improved new vehicle availability remains to be seen.”

UCDA members were surveyed regarding their sales volumes over the past four years to offer some context for the performances seen in 2022. For new vehicle dealers, used vehicle sales dropped in 2022 to just below pre-pandemic levels on average. For used vehicle dealers, sales saw a decrease in 2022 as well although the overall average of 160 units settled above the average of 157 cited for 2019.

When asked about their sales expectations for 2023, both franchised new vehicle dealers and independent used vehicle dealers were optimistic. New vehicle dealers cited an expectation of 308 units sold on average for this year, rising well above the levels of the last four years. Similarly, used vehicle dealers expect to sell an average of 186 units, also well above the past four years. Achieving such lofty goals may prove challenging given industry dynamics, but for now the optimism amongst respondents was widespread.

When asked about supply and the sourcing of vehicles—a major point of concern in recent years—dealers were somewhat split. The largest portion of both new and used vehicle dealers noted that sourcing of used vehicles improved in the second half of 2022, at 43.7% and 43.8% respectively. However, 38.3% of used vehicle dealers saw their situation get worse with 32.2% of new vehicle dealers noting the same thing.

To an extent, this split in opinion followed into the question of used vehicle prices. Franchised new vehicle dealers overwhelmingly noted that used vehicle prices decreased in the fourth quarter of 2022 with 66.7% of responses indicating as such. For independent used vehicle dealers, a slim majority of respondents noted prices increasing for used vehicle sales with 34.4% citing that prices decreased. On average between the two groups, 47.4% of responses indicated dropping prices, 38.6% indicated rising prices, and 14.0% indicated no change.

Newsletter: “Used Vehicle Update – Volumes Fall in 2022 as Sourcing Improves Marginally”, DesRosiers Automotive Consultants Inc. March 7th, 2023.

More information on these numbers can be found in the DesRosiers Automotive Reports published by DesRosiers Automotive Consultants Inc., or contact Daniel Azarov at daniel@desrosiers.ca.