Used vehicle prices are rising while supply remains constrained, according to a recent update from DesRosiers Automotive Consultants (DAC).
In looking at the used vehicle market situation, and working with the Used Car Dealers Association, DAC reached out to used car dealers to track their progress and recovery since the spring. DAC said the majority of dealers (68.6%) saw price increases “of varying degrees” in July.
“A shortage of vehicles traded-in during the spring months has led to supply-demand mismatches in the market pushing prices higher,” said DAC. “This is also reflected in vehicle sourcing patterns for dealers in July, with the great majority of dealers indicating challenges in sourcing some or all vehicles.”
Only 9.5% of respondents said they had no difficulty in sourcing vehicles.
Looking back at the change from the spring period when used car dealerships re-opened their doors, only 13.9% were open for their regular hours in April while 48.3% were open for regular hours in July. Complete closures of used car stores also dropped from 42.1% in April to just 5.0% in July.
In July, consumers released pent-up demand with nearly 40% of surveyed dealers noting sales volume growth, compared to a year earlier. Then again, 21.1% also indicated a sales decrease of one to 25%, while 23.4% noted a decrease of 26-50%. And 15.9% experienced a decrease of 51-100%. In April, used car dealers said their sales volumes had declined — with the majority (54.8%) noting a decrease of 76-100%.
“For the year overall, close to 80% of dealers expect the market to be down from 2019, with the largest segment of dealers, 32.4%, expecting total sales to decrease 1-25% in 2020,” said DAC.
The survey was conducted between August 4-11, with responses from nearly 600 used car dealers.
