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.