The 2023 forecast for overall used vehicle sales has been downgraded slightly.
In its mid-year review Tuesday, Cox Automotive analysts dropped their projections for used vehicles sales from the 36.2 million after the first quarter to 35.7 million in June.
“The impact from interest rates cannot be understated,” said Chris Frey, senior manager of economic and industry insights at Cox Automotive. “Those high prices simply keep some buyers from entering the market at all.”
The retail sales forecast also fell from 19.2 million to 18.9 million.
“The year started off stronger in 2022, but headwinds persist enough to have us pull our numbers back a little,” Frey said.
But it was not all doom and gloom from the numbers. Frey pointed out many of today’s trends resemble 2019, and the market has remained mostly stable in spite of the “triple whammy” of high prices, inventory challenges and soaring interest rates.
“The current signs point to a normal rest of 2023. That is at least normal when compared to 2019. Normal feels like a win compared to the most recent two years.”
Chris Frey, senior manager of economic and industry insights at Cox Automotive
“The current signs point to a normal rest of 2023,” Frey said. “That is at least normal when compared to 2019. Normal feels like a win compared to the most recent two years.”
After a stronger than expected start to the year, sales have cooled in the second quarter. According to Cox Automotive data, sales are down 3 percent from 2022.
The total supply of vehicles is down 10 percent, 256,000 units, at about 2.19 million. Frey pointed out that is a drastic improvement from March, when the supply was down 20 percent year over year.
“It’s a nice turnaround,” Frey said. “But supply indeed remains challenged.”
The days of supply is at 46 days, down from last June’s 50 days.
“It’s worth noting the day supply is fairly normal for this time of year, which is something we haven’t seen for three years,” Frey said. “Dealers are balancing their inventory to the sales rate, keeping days supply steady. Even as total supply continues to improve in the used market.”
The average list price is down from $28,050 a year ago to $27,266. The average mileage of listed used vehicles is up from 69,559 to 70,568, which Frey said has a direct correlation to the slow of new vehicle production during the pandemic.
Certified pre-owned vehicle sales are approximately 15,000 units ahead of 2022. Frey said the expanded pool of available certified units has likely kept the pace of CPO sales up.
“Overall used inventory remains tight, but the potential inventory for CPO is a bit larger from the expanded program criteria,” Frey said. “For the most part, we’re expecting sales to track somewhat closely to 2022, with an increase in sales starting in October to finish the year around 2.6 million.”
