Used Vehicle Update – Sales Expectations Decreasing |

Working with our friends and colleagues at the Used Car Dealers Association, DesRosiers Automotive Consultants recently reached out to the used vehicle retailer community to track market performance so far in 2023. Hundreds of 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 halfway through 2023.The used vehicle market saw a meteoric rise in prices and sharp drop in the availability of used vehicles from 2020 to 2022. “The latter parts of 2022 and the first half of 2023 saw some moderation in used vehicle prices as improved new vehicle supply began to partially alleviate some pressure from used vehicle demand” commented Andrew King, Managing Partner at DAC. However, vehicle sourcing remains a concern and pricing still remains very high historically.

Sales results for the first half of 2023 came in at an average of 67 units for independent used vehicle dealers, in line with results from the first half of 2022. Among franchised new vehicle dealers, used vehicle sales showed light improvement, up to 155 units on average boosted by increased trade-ins. Despite the minor increase, sales expectations for the whole of 2023 came in at 305 units for franchised new dealers and 140 for independents, lower than the sales expectations cited at the beginning of the year.

Sourcing of used vehicles remains problematic – especially for independent used vehicle dealers. Only 12% of independents cited sourcing had improved, with a slim majority, at 51%, noting that their sourcing troubles have become worse. For the first half of 2023, franchised new vehicle dealers sourced 74% of their used vehicles directly from consumers, in large part thanks to their access to trade-in vehicles, whereas independents primarily sourced from auctions, at 57%.

Looking at average results across all survey participants, dealers were quite evidently split on the question of used vehicle price changes. For passenger cars, 34% of dealers noted price decreases while 44% noted increases. The same was true for SUVs with 36% noting price decreases against 41% noting increases. This split extended to pickups which saw price decreases according to 39% of respondents against 36% that noted increases. In all three cases, stable prices represented roughly around one quarter of responses.

Azarov, D. (2023, August 10). Used Vehicle Update – Sales Expectations Decreasing. DesRosiers automotive reports.