Used Car Sales
2015 was the year to buy New, and 2016 so far has been the year of used car sales. Edmunds reported there were over 10 million used-vehicles sales just in the first 3 months of 2016, which is the highest number of used cars and trucks sold in over 4 years. This comes right after 2015 had shown the best numbers in terms of new cars sold since 2004.
Image by Zelda Richardson
So what has led consumers to buy used over new? One belief explained by Mr. Ed of Phoenix, a used-car financing company is since last year was such a big year for new model releases compared to this year, we are just seeing lack of advertising. There are less new vehicles to be excited about, and a lot of car buyers are opting for older models that were featured through advertisement a year or two ago.
Edmunds analysts are also reporting that they are seeing a lot of lease returns over the past year compared to years prior, that are leaving their lease, and going right into purchasing the vehicle as used. So far in the months of April and May, they are also seeing an increase of nearly 7 percent from the year prior, which makes us believe that this used car buying trend is still going strong.
Usually car dealerships begin to see the shift from used to new car purchases around the Summer months. It will be quite interesting to see how that develops over the next three or so months. Right now Cox Media Group is predicting used car sales to eclipse 40 million sales, which they claim is slightly above average.
From a more political perspective and analysis of this trend, some make the argument that the market usually changes, and even trends downward during an election year. That could very well explain the large interest in used vehicles over new, as the payments are lower.