Used-car sales saw only a slight decline last month and the seasonally adjusted annualized rate of sales remains on a steady course, according to Cox Automotive.
There was a 0.1% dip in sales volume for used cars in September, the company said, compared to an 11.3% slide on the new-car side.
The overall used-car SAAR for the month was 39.8 million, which was flat month-over-month and up from 39.7 million in September 2018, the company said.
Separately, there’s also a metric termed “used retail SAAR,” where Cox Automotive takes out private-party sales and only considers franchised and independent dealer sales.
That SAAR measure came out to 20 million units last month, steady with August and up from 19.6 million in 2018.
Here is how the rolling 13-month overall used-car SAAR and the used retail SAAR figures have trended over the past year, respectively, according to data provided by Cox Automotive.
Overall Used-Car SAAR
September 2018: 39.7 million
October 2018: 40 million
November 2018: 36.8 million
December 2018: 39.8 million
January 2019: 39.1 million
February 2019: 37.7 million
March 2019: 40 million
April 2019: 41.3 million
May 2019: 39.3 million
June 2019: 39.8 million
July 2019: 39.7 million
August 2019: 39.8 million
September 2019: 39.8 million
Used Retail SAAR
September 2018: 19.6 million
October 2018: 19.4 million
November 2018: 16.5 million
December 2018: 18.4 million
January 2019: 22.4 million
February 2019: 21.5 million
March 2019: 20.5 million
April 2019: 19.3 million
May 2019: 19.2 million
June 2019: 19.9 million
July 2019: 19.9 million
August 2019: 20 million
September 2019: 20 million
In the Q3 Manheim Used Vehicle Value Index Call, Cox Automotive chief economist Jonathan Smoke shared more detail about the difference between the overall used SAAR and the used retail SAAR.
Cox Automotive’s estimates are “basically different than the perceived conventional wisdom in the market,” Smoke said.
“The conventional wisdom agrees on the total, that this is roughly a 40 million used-vehicle market, but the traditional view in the United States has been, it’s been a third, a third a third,” he said, referring to the notion of a third of used-car sales coming from independent sales, a third coming from franchised dealers and a third being between private parties.
“However, our observation is based on a detailed analysis of registration data from many years that highly challenge that question,” Smoke said.
He said that the number of used cars that franchised dealers sell is less than the number of new cars they sell. Based on that math, Smoke said, franchised stores “can’t possibly” take up a third of the used-car market, which again, reaches 40 million annually, he said.
Rather, based on the SAAR trends above, it appears the private-party market takes up about half of the used-car market, with dealers (franchised and independents combined) taking up the other half.
Offering some overall market analysis, Smoke said in a news release: “While the new-vehicle market saw a big drop in volume in September, total used-vehicle sales volume was down only slightly.
“However, in September, the Manheim Used Vehicle Value Index saw its worst month since January, ending flat year-over-year and negative month-over-month. This also was the worst September decline in 18 years. The question will be if this is an earlier seasonal shift, as we saw last October, or is this the start of a more rapid deceleration in used vehicle values tied to decreasing demand.”
Source : AutoFinanceNews
