Record used-vehicle sales in U.S. in 2017
Never before has the U.S. used-vehicle industry moved so many units as in 2017. Year-on-year sales were up 1.6% to 39.2 million vehicles, the most recent Used Car Report by Edmunds reveals.
Two major factors power the rise of America's used-car industry, one 'incidental', the other more structural.
On the one hand, the U.S. - and in particular, large parts of Florida and Texas – suffered from hurricanes that destroyed vehicles in their hundreds of thousands, thus fuelling the need for rapid, cheap replacement vehicles. And on the other hand, the U.S. used-car market is being fed by a continuously increasing supply of off-lease vehicles (i.e. lease vehicles coming out of contract).
Fortunately, volume increase has not led to a drop in overall prices. Used-vehicle prices still rose in 2017, albeit at a slower pace than in previous years. They increased on average 3.6% from 2012 to 2016, and 1.4% last year.
That used-car prices rose at all is largely due to the SUV segment, Edmunds says. The limited supply vis-a-vis the relatively large demand for used SUVs helped push up prices in this market segment, which 'saved' the U.S. used-vehicle market last year.
Which means that for other segments, prices have gotten more attractive for prospective buyers. For example for two- to three-year-old passenger cars.
The number of vehicles leased to rental agencies dropped from 6.2 million in 2016 to 5.9 million in 2017, a decline Edmunds ascribes to the rising popularity of ride-hailing and car-sharing services among traditional rental customers.
As the market shrinks, manufacturers will attempt to both protect residual values and keep sales volumes of new vehicles high, Edmunds analysts note. This will have positive consequences for used-vehicle customers, who may find
“Since trucks and SUVs with a reasonable number of options tend to hold their value, rental car customers might be pleasantly surprised to find lots stocked with larger vehicles,” the report states.