The number of used vehicles in inventory on both independent and franchised used car dealer lots rose throughout 2023, reaching levels in December that matched those last seen in the fourth quarter of 2022.
Absolute numbers of vehicles in used car inventory rose 4 percent year-over-year according to research by Cox Automotive, with 2.39 million unsold at dealerships at the end of December 2023.
Viewed from the perspective of days’ supply, used car units increased by 1 percent year-over-year to 56 days’ supply. This means that current inventory would take 56 days to sell out at current sales volume if no additional stock were added to the inventory. Vehicle days supply has been fairly stable at approximately this level since the start of November 2023.
About 1.3 million used car units were sold during December. While this was up 2 percent from 2022, Cox senior insight director Jeremy Robb remarked “for the full year, we estimate sales for used retail were down about 3 percent, curtailed by a constrained supply of newly used vehicles into our ecosystem.” Robb believes supply will be “constrained” into the immediate future as well.
However, used vehicles supply was much smaller earlier in the year, with inventory “bottoming out at a low historical level in the first quarter of 2023” according to Robb. The increased supply helped reduce average used car prices by 3 percent from December 2022, though the average cost increased slightly month-over-month to $26,446, or about $220 more. This figure mirrors an August study indicating used vehicles under $20,000 account for only 12.4 percent of those currently available compared to 49.3 percent in 2019.
Other data shows that the average mileage on used cars in inventory at the end of December is 68,794 miles. Average mileage has also risen sharply, with an approximate 20 percent average increase over 2019 mileage figures for approximately 50 percent of the used vehicles on the market in 2023.
Nevertheless, another Cox study shows car buyers are having a better buying experience and are happier with their purchases. The same study showed used car purchases increased 36 percent year over year as a percentage of total sales, accounting for 15 percent of all passenger vehicles bought in 2023.
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Comments
Dealers are no longer paying stupid money for used cars either. Those days are over.
they certainly are…. check auctions. Theres a lot of no sales going on but prices are still stupid high. which almost doesn’t matter because i see them double the price when they list a vehicle. so it dont matter if they buy it for 10k or 15k.. its double on their lot.
in case somebody wants to know how much wiggle room you have :)))
You’re insanely out of touch if you think dealers are doubling their money. If that was the case, large companies like Vroom would not be suspending all operations.
you must not understand the difference between list price and your net price. vroom was a ponzi and completely irrelevant to the millions of small dealers around the nation. vroom was also usually the highest bidder for cars surpassing even carmax prices. who they sold to, im not sure. never seen a vroom sale.
all i can tell you is what im looking up locally. they buy for 6k and its listed for 13800 on their lot. the 6k doesnt include the auction fees (10% usually) etc etc. i am talking about the list price. in very few industries can you flip a used depreciating item for double what you paid for it and actually have a sucker pay it….
12k lists for 21k and i can keep looking but whats the point. you are convinced in your own belief.
and my personal fav on a bronco thats been for sale for 2 years now. they bought it for 38. they wanted 76k (lol) and now its down to a bargain 49k! what a deal! remember, they bought for 38xxx……..
years ago you would literally be happy to get 500-1000 per vehicle. now their margins are so fat they can survive with very few car sales. volume sales model is currently dead. price gouging model is all the craze.
thats why you are not seeing much of a decrease of prices on the retail. they are pocketing the difference or trying to anyway.
i cant see all cars but the 5-6 dealers i look at all match what i wrote. they are not sleazy dealers either..
the nearest chevy dealer overprices 15-20k on their used vehicles. buys a tahoe trade in for 40k and lists it for 55900. every other car is minimum 10k padded on the flip. obv they cant double it because those are newer and expensive vehicles but you get the idea, i hope you do.
so when they tell you they dont negotiate, just remember how much negotiating room they actually have. and thats before the 969 dealer fee………………..
I always buy new and never trade in so I’m not familiar with that market.
I traded in a 9-year-old car for $5k. Dealer listed it for $8900. It was gone in a week.
Hopefully things will start getting back to the way they were before Covid hit. Covid change a lot of businesses and life’s. Looking forward to everything getting more normalized. Maybe by the end of 2024. 🙂
Plus you get the tax break from trade in also same as selling private.Avoiding all tire kickers!