The used-vehicle industry reached a record-breaking 39.2 million in sales in 2017, representing a 1.6% year-over-year increase, according to the latest Used Car Report from Edmunds.
A number of factors led to this growth, such as the hurricanes that destroyed hundreds of thousands of vehicles in parts of Florida and Texas and the continued growth of off-lease vehicles entering the used market.
And, it’s not just volume that is growing in the used space; prices are also on the rise. In 2017, used vehicle prices rose 1.4%, compared to the 3.6% growth averaged between 2012 and 2016.
“Consumer demand for SUVs — which were limited in supply — is really what helped fuel the modest price growth that the used market eked out in 2017,” said Ivan Drury, senior manager of industry analysis at Edmunds. “Shoppers looking for better deals on new used vehicles will likely find them on 2- to 3-year-old passenger cars, since their residual values were hit so hard by this trend.”
Looking at rental agencies, the number of vehicles leased to these agencies dropped to 5.9 million in 2017, compared to 6.2 million in 2016. One major factor affecting this decline is the growing popularity of ride-hailing services and peer-to-peer car sharing among rental customers.
“As automakers search for ways to protect residual values yet keep sales volumes high in a shrinking market, Edmunds analysts noted several converging dynamics in the fleet segment. Since trucks and SUVs with a reasonable number of options tend to hold their value, rental car customers might be pleasantly surprised to find lots stocked with larger vehicles,” noted the Edmunds report.