ACV facts & figures
New car versus a used car. It’s a decision car buyers need to make when searching the automotive market for their perfect ride. What has the data shown for what’s going on in the automotive industry on the used car side? We’ll look at past and present numbers to see where used car automotive sales for passenger cars and light trucks (pickup trucks) have fared over the years in the U.S. market.
Where the Used Car Market Has Been
So, what have retail sales been like for used cars in the U.S. car market? Between July 2011 and July 2021, monthly used car sales stats jumped from $6.3 million to $13.65 million in retail sales at used car dealerships.1
Coming out of the recession, the bump was widely attributed to consumer preference for used cars citing better value and greater affordability during the economic recovery.
In 2019, a year before the coronavirus pandemic, car buyers were in the market and purchasing used vehicles at a rate of three times higher than new cars. In fact, 40.8 million used cars and trucks were sold that year, while new vehicle sales leveled out at 17 million. According to Edmunds experts, an unusually high number of lease returns coupled with rising vehicle prices and high-interest rates bolstered the used car market.20
How the Used Car Market Changed During the Pandemic
The automotive industry was one of the major industries affected by the coronavirus pandemic. Domestic auto manufacturing in the U.S. saw a decrease of 99% at the beginning of the pandemic. Because of the car manufacturing and supply-chain issues (including the shortage of semiconductor chips) during the pandemic, used car sales rose over new vehicle sales. March 2020 showed used vehicle sales at a monthly average of 140. And ended 2020 with a monthly average of 150 for the U.S. city average.
During the first 2 years of the pandemic, the price of used cars surged by approximately 17%. In 2020, 39.3 million used motor vehicles (light vehicles) were sold across the U.S., while new light-vehicle sales accounted for only 14 million that year. Used car sales also escalated during the coronavirus pandemic because consumers were wary of taking public transportation and rideshare services.3
Are Used Car Sales Slowing Down?
U.S. auto sales for used vehicles have dipped slightly since the beginning of 2022, according to FRED Economic Data. The U.S. city monthly average for used cars and trucks (under the Consumer Price Index for all urban consumers) started the year at an average of 210. And dropped to an average of 206 in April.
Consumers are surveying the auto industry longer to find their used vehicle match, taking an average of 171 days in March 2022 compared to 89 days in March 2021.
In 2021, Edmunds found that the average transaction price for a used vehicle increased by $2,433 in the first two quarters of the year…$25,410 in Q2 from $22,977 in Q1. Those numbers accelerated from the average price of $20,942 in the second quarter of 2020.
According to the U.S. Bureau of Labor Statistics, January 2022 saw an increase in price for used vehicles of 40.5% in comparison to January 2021.
Prices for used vehicles are forecast to remain high throughout 2022. J.D. Power foresees the values of used cars beginning to level out starting the year-end of 2022. And a report from Automotive News sees used car prices dropping between 20%-30% by the end of the year.
But will prices go back to what they were before the pandemic? Even though prices seem to be teetering over the years, the demand for used cars seems to still dominate in 2022. This is because supply chain and production issues continue to rock the industry. Consequently, experts predict prices will remain elevated for some time to come. The push and pull of supply and demand need to plateau before new car and used car prices can level out.
What’s the Future of the Used Car Market?
CEOs of major automotive manufacturers, such as BMW and Ford, have stated that they believe the semiconductor chip shortage could last until 2023. Although the low used vehicle supply is beginning to show some improvement across the U.S., current chip and vehicle production shortages from major manufacturers are driving up the demand for used vehicles.
Consumers may not want to wait for the new car they're searching for to be produced, so they are leaning more toward purchasing used vehicles.
In the upcoming years, the used car market’s future is looking bright. Globally, the used car market size may leap to $2.67 trillion by 2030. That’s a compound annual growth rate (CAGR) of 6.1% between 2022 and 2030.8
Used Electric Vehicles
To curb gas tank sticker shock, consumers are increasingly more interested in electric vehicles. As gas prices continue to go up, the industry is seeing sales rise 60% year-over-year since 2021. Used Chevrolet Bolt EV, Nissan Leaf, and Tesla Model 3’s are now a big part of the used EV selling club as different model years are vying for a spot as a top contender in the game.
There are pros to purchasing used EV models. These include savings on gas, government incentives, and the ability to drive in carpool lanes. But make sure you do your research into battery life and degradation. And if a plug-in hybrid or all-electric is the better choice for you, then you may want to go in that direction.
Sourcing in-demand used vehicles
Wholesale buying for your dealership is easy with ACV Auctions. We’re here to help you find used cars for your lot that suit your customers’ needs. Our full-service wholesale marketplace offers real-time pricing data, custom filtering and notifications, and immediate online market access. Letting you check out nationwide vehicle inventory — 24/7 — during our 20-minute auctions. You’ll be on your way to finding used vehicles from different automakers after a simple approval process. All at the vehicle prices, you need.
- Federal Reserve Bank of St. Louis “FRED Economic Data” Retrieved May 2022 from https://fred.stlouisfed.org/series/CUUR0000SETA02
- Edmunds “Used Vehicle Prices Expected to Climb to Record Highs as New Vehicle Prices Stay Steady in Q2, According to Edmunds” Retrieved May 2022 https://www.edmunds.com/industry/press/used-vehicle-prices-expected-to-climb-to-record-highs-as-new-vehicle-prices-stay-steady-in-q2-according-to-edmunds.html
- CNBC “Demand for used cars drops from a year ago but high prices aren’t budging” Retrieved May 2022 from https://www.cnbc.com/2022/04/07/demand-drops-for-used-cars-but-high-prices-arent-budging.html
- Federal Reserve Bank of St. Louis “FRED Economic Data” Retrieved May 2022 from https://fred.stlouisfed.org/series/MRTSSM44112USN#0
- UCLA Anderson Review “Dealers Might Not Profit from Soaring Used-Car Prices” Retrieved May 2022 from https://anderson-review.ucla.edu/dealers-might-not-profit-from-soaring-used-car-prices/
- Statista “New and used light vehicle sales in the United States from 2010 to 2020” Retrieved May 2022 from https://www.statista.com/statistics/183713/value-of-us-passenger-cas-sales-and-leases-since-1990/#:~:text=Sales%20of%20used%20light%20vehicles,39.3%20million%20units%20in%202020.
- Carsurance “18 Undeniable Used Car Sales Statistics” Retrieved May 2022 from https://carsurance.net/insights/used-car-sales-statistics/
- Cision PR Newswire “The Worldwide Used Car Industry is Expected to Reach $2.67 Trillion by 2030” Retrieved May 2022 from https://www.prnewswire.com/news-releases/the-worldwide-used-car-industry-is-expected-to-reach-2-67-trillion-by-2030--301557293.html#:~:text=The%20global%20used%20car%20market,6.1%25%20from%202022%20to%202030.
- Forbes “The Best Investments Right Now Might Actually Be Used Cars or Trucks” Retrieved May 2022 from https://www.forbes.com/sites/stevetengler/2022/05/31/the-best-investment-right-now-might-actually-be-used-cars-or-trucks/?sh=86398d82d05f
- Motor Trader “Consumers three times more likely to buy used cars over new” Retrieved May 2022 from https://www.motortrader.com/motor-trader-news/automotive-news/majority-buy-consumers-opt-used-new-cars-28-10-2019
- MarketWatch “Professional investors have their eye on these eight stocks as the used-car market in the U.S. moves online” https://www.marketwatch.com/story/professional-investors-have-their-eye-on-these-eight-stocks-as-the-used-car-market-in-the-us-moves-online-2020-10-02#:~:text=According%20to%20Statista.com%2C%2040.8,17%20million%20new%20vehicles%20sold.
- Newsweek “Chip Shortage Will Continue Into 2023, Say Analysts and Executives” Retrieved June 2022 from https://www.newsweek.com/chip-shortage-will-continue-2023-say-analysts-executives-1699733
- Car and Driver “When Will Car Prices Come Back to Earth?” Retrieved June 2022 from https://www.caranddriver.com/news/a39357957/car-prices-high-when-will-change/
- Bankrate “New vs. used car value: Navigating the current car market” Retrieved June 2022 from https://www.bankrate.com/insurance/car/car-value-statistics/
- Fortune “What to expect in the 2022 used car market” Retrieved June 2022 from https://fortune.com/2021/11/01/used-car-prices-high-carmax-2021/
- Recurrent “Used Electric Car Prices & Market Report – Q2 2022” Retrieved June 2022 from https://www.recurrentauto.com/research/used-electric-vehicle-buying-report
- Inside EV “Used Electric Car Prices Soared in 2021” Retrieved June 2022 from https://insideevs.com/news/560332/used-electric-car-prices-soared/
- NerdWallet “In This Hot Used Car Market, Used Plug-Ins Can Be a Deal” Retrieved June 2022 form https://www.nerdwallet.com/article/loans/auto-loans/in-this-hot-used-car-market-used-plug-ins-can-be-a-deal
- Edmunds. “Used Vehicle Market Poised for Record Sales in 2019.” Retrieved June 2022 from https://www.edmunds.com/industry/press/used-vehicle-market-poised-for-record-sales-in-2019-according-to-new-report-from-edmunds.html