The North American used market is roughly 2.5-times bigger than the new car market. That ratio is not going down soon – given the Obama Administration’s recovery from the Republican-induced Great Recession of 2008- 009. Record vehicle sales in 2015 and thus far in 2016, as well as strong years in 2012-2014, means there will be pricing pressures from the increasing number of off-lease vehicles entering the used car market.
The National Automobile Dealers Association (NADA) is holding steady its sales forecast of 17.7 million new cars and light trucks for 2016. (U.S. Vehicle Sales to Remain Strong in 2016? or Month of Reckoning? Ford, GM, Toyota U.S. Sales Down in July)
Add in the so-called “disruptive market participants” in the retailing of used cars, original equipment manufacturers’ (OEMs’) actively promoting used cars through extended warranties, and cheap credit as the Fed keeps printing money to bailout Wall Street billionaires and you have a classic buyers’ market.
The only question is when does this bubble burst?
- Certified Used Vehicle Sales Set Record in 2014
- Kia Adds Carfax Vehicle History Reports to Used Cars
- Cadillac Matches New Car Warranty on Used Cars