The idea of purchasing a three-year-old crossover or SUV over a brand new vehicle is an attractive offer for many buyers. It’s especially true as affordability becomes an issue with rising interest rates and new vehicle prices.
According to a Wards Auto report published last Thursday, a “tsunami” of used CUVs and SUVs will likely wreak a bit of havoc on the auto market in the United States. It’s expected that 3.9 million leased vehicles will return to dealerships this year. Most of them are SUVs and pickups—exactly what consumers want right now.
Before the crossover craze took hold, many off-lease vehicles were passenger cars, which kept the new car market strong. With gently used crossovers in the mix, buyers can now compare a slightly older model to a brand new one.
“If you can buy a 3-year-old CUV that’s $10,000 to $15,000 less than a comparable new CUV, that’s attractive to a lot of shoppers,” said Zohaib Rahim, Cox Automotive’s manager-economic and industry insights. “It’s a great price for not that old of a unit, and it’s the type of vehicle consumers want.”
Another 4.1 million leased vehicles will return to dealers next year. In 2020, another 3.9 million.
But, Rahim said it won’t bring down the new car market. Instead, it could force automakers to incentivize new cars even more to better compete with used vehicles that come with certified warranties.