Auto Remarketing December 15 2016 : Page 12

CERTIFIED CER TIFIED PRE-O PRE-OWNED WNED FOCUS CPO hits record Q3 share By Joe Overby, Senior Editor SANTA MONICA, Calif. — Certifi ed pre-owned is taking thicker slices of that fran-chised dealer used-car sales pie. In fact, CPO share has reached a new landmark. In the third quarter, 23.2 percent of used-vehicle sales at franchised dealers were certifi ed, according to the latest Used Vehicle Market Report from Edmunds.com. Certifi ed pre-owned’s Q3 share has never before reached this mark, Edmunds said. Out of the 2.92 million used vehicles that franchised dealers sold last quarter, 675,551 were CPO, according to the report. Th ose quarterly certifi ed fi gures are a 3.4-percent year-over-year hike. Meanwhile, the record third-quarter share for CPO is up from 21.8 percent a year ago. “Th e trend was compounded by a slight decrease in overall franchised used sales, stemming from a decrease in trade-ins on new-car sales,” Edmunds said in the report. Year-to-date through September, just 45 percent of new-car sales have had a trade-in, the company said. Th at’s down a couple per-centage points from a year ago. Th ere have been 4.71 million trade-ins so far this year; at this time in 2015, it was closer to 5 million. More ‘near-new’ cars Another factor perhaps favoring CPO: inventory is getting younger. Cars ages 3 years or younger accounted for 60 percent of all franchised dealer used-ve-hicle sales in Q3, Edmunds said. Th at share has steadily climbed in each of the last four years aft er coming in at 46 percent in 2012. Th at speaks to one of the key takeaways that Edmunds listed in the report: “Chang-es in new-car buying behavior are beginning to alter the landscape of franchised used ve-hicles. Continued growth in leasing combined with fewer trade-ins are skewing used vehicle inventories towards near-new vehicles.” A used car sold at a franchised dealer lot last quarter was, on average, 4.0 years old. A year ago, it was 4.3 years. Roughly 20 percent of franchised used sales in Q3 were 3-year-old units, up from just over 16 percent a year ago, according to an Ed-munds chart. And lease returns are playing a big part in Used Vehicles Sales Summary Quarter Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Total Sales 9,242,998 9,355,565 9,202,280 9,221,601 9,448,857 9,758,814 Franchise Used 2,436,724 2,531,912 2,862,619 2,931,736 2,995,497 2,917,510 CPO 438,719 465,963 540,260 611,010 653,286 675,551 CPO Share of Franchise Used Sales Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q5 2015 Q3 2016 CPO RECORD // continued on page 13 SOURCE: Edmunds.com Elcometer 311 Automotive Paint Meter Iden ti fy the damage you can’t see... The NEW reports including hidden rework, impact damage, resprays of between steel and aluminium panels Pre-calibrated for immediate use -just start measuring Connects to your own color display -measure at any angle paint meter at 60+ readings per minute ® www.paintmeter.com ™ wireless technology compatible with ElcoMaster ¨ sales@paintmeter.com and other countries. App Store is a trademark of Apple Inc., registered in the U.S. and other countries. All other trademarks acknowledged. USA & Canada: (800) 521-0635 12 Auto Remarketing www.AutoRemarketing.com December 15–31, 2016

CPO hits record Q3 share

Joe Overby

SANTA MONICA, Calif. — Certified pre-owned is taking thicker slices of that franchised dealer used-car sales pie. In fact, CPO share has reached a new landmark.

In the third quarter, 23.2 percent of used-vehicle sales at franchised dealers were certified, according to the latest Used Vehicle Market Report from Edmunds.com.

Certified pre-owned’s Q3 share has never before reached this mark, Edmunds said.

Out of the 2.92 million used vehicles that franchised dealers sold last quarter, 675,551 were CPO, according to the report. Those quarterly certified figures are a 3.4-percent year-over-year hike.

Meanwhile, the record third-quarter share for CPO is up from 21.8 percent a year ago.

“The trend was compounded by a slight decrease in overall franchised used sales, stemming from a decrease in trade-ins on new-car sales,” Edmunds said in the report.

Year-to-date through September, just 45 percent of new-car sales have had a trade-in, the company said.  That’s down a couple percentage points from a year ago. There have been 4.71 million trade-ins so far this year; at this time in 2015, it was closer to 5 million.

More ‘near-new’ cars

Another factor perhaps favoring CPO: inventory is getting younger.

Cars ages 3 years or younger accounted for 60 percent of all franchised dealer used-vehicle sales in Q3, Edmunds said. That share has steadily climbed in each of the last four years after coming in at 46 percent in 2012.

That speaks to one of the key takeaways that Edmunds listed in the report: “Changes in new-car buying behavior are beginning to alter the landscape of franchised used vehicles. Continued growth in leasing combined with fewer trade-ins are skewing used vehicle inventories towards near-new vehicles.”

A used car sold at a franchised dealer lot last quarter was, on average, 4.0 years old.  A year ago, it was 4.3 years.

Roughly 20 percent of franchised used sales in Q3 were 3-year-old units, up from just over 16 percent a year ago, according to an Edmunds chart.

And lease returns are playing a big part in that and in the overall age decrease on dealer lots. Lease volume was up 25.6 percent year-over-year in 2013, and many of those are now re-entering the market as used.

Put differently, Edmunds said in the report: “From 2012 to 2013, lease volumes increased by 658K units, which has significantly altered today’s franchise used dealer inventories.”

Looking forward

Near-new inventory is grabbing more share on franchised dealer lots — and don’t expect that to stop any time soon.

Lower trade-in figures, a flattening of new-car sales and ever-rising lease rates are swaying the market younger.

Regarding the latter, lease penetration — on a rise the last four years — has reached 31 percent year-to-date, Edmunds said. Similarly, lease volume for the year is now at 3.23 million.

“The growing trend of new-vehicle buyers either not having a trade-in or not willing to part with their vehicle at the dealership is beginning to take effect on the used market,” Edmunds said.

“Plateauing new-car sales combined with a lower share of trade-ins has regressed the overall trade-in volume to 2014 levels,” it continued. “With trade-ins averaging 6 years old and fewer of them on dealer lots, the recent level of lease volumes sets the stage for vast amounts of near-new inventory dominate the used-car market for years to come.” 

Read the full article at http://browndigital.bpc.com/article/CPO+hits+record+Q3+share/2662403/367549/article.html.

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