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Used-car sales climb as Americans hold onto older vehicles

Prices drop slightly across the board, but dealers still have relatively limited supplies of lower-mileage models.

By Clifford Atiyeh Feb 4, 2013 8:06AM
Used-car sales are continuing to climb this year, bolstered by a five-year high for new-car sales in 2012 and an aging vehicle fleet that echoes the tightened spending and uncertain job market faced by most Americans.

About 40.5 million used vehicles changed hands last year, a 4.4 percent increase from 2011, according to analyst firm CNW Research, which estimates private, retail, fleet and commercial sales of used light-duty vehicles. By the fourth week of January, sales of used cars were up 4 percent year-over-year, at about 2.3 million vehicles total.

According to AAA, the average age of all cars currently on U.S. roads is 11, up from about 9.4 years in 2009 and 8.4 years in 1995.

As usual, the top-selling used vehicles mirror most of the top-selling new vehicles. More than 1.1 million used Ford F-Series pickups were sold in 2012, marking the truck's 13th straight year  leading the used market and outselling new models by nearly double, according to CNW. The Toyota Camry -- still the No. 1 selling new passenger car -- racked up more than 1 million used sales, followed by the Honda Accord (992,000), Honda Civic (809,000) and Toyota Corolla (808,000). Other popular used models included the Ford Focus, Ram pickup, Nissan Altima, Chevy Silverado and Ford Explorer, each of which sold more than 619,000.

Sales of certified pre-owned (CPO) cars by franchised dealers represented only 4.5 percent of the total used market, at about 1.8 million. CPO cars typically have an extended factory warranty and are supposed to have been inspected more closely. Americans bought more Asian brands than domestics -- 51 percent, compared with 32 percent -- with Kia, Hyundai, Mazda and Nissan posting big double-digit year-over-year gains, according to Autodata Corp. When accounting for all corporate divisions, Ford was the only domestic make to post an increase in CPO sales (32 percent), with Chrysler and General Motors dipping slightly.

A lagging supply of lower-mileage dealer trade-ins pushed prices of CPO cars upward in 2012, said Paul Taylor, chief economist for the National Automobile Dealers Association. Taylor said new-car sales should increase by 1 million in 2013 and spur an additional 600,000 used-car sales. About 60 percent of a dealer's used stock is trade-ins from buyers looking to get a new car.

"With the general shortage of cars [and] more mileage on average, then it becomes harder to find the low-mileage, near-perfect trade-ins that [dealers] need for CPO programs," Taylor told MSN Autos.

Many dealers, he said, may start offering shorter new-car leases in an attempt to get more low-mileage used cars on the lot. On average, dealers make significantly more money on used cars than new cars. In November 2012, the latest data available from NADA, used cars racked up $2,100 in profit versus $1,300 for new cars.

But buyers can stay confident throughout 2013. Used-car prices dropped in January among both franchised and independent dealers, to $10,558 and $9,158 respectively, according to CNW. While not huge, that represents a respective decline of 3 and 6 percent.

Want the best deal? No matter if you're buying from a private seller or a dealer, pay attention to resale values for specific makes and models, and look for factory incentives on CPO cars, especially from lower-selling luxury brands like Audi. Time it just right, and you might walk away with a heavier wallet.
99Comments
Feb 4, 2013 9:56AM
Feb 4, 2013 10:48AM
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Go figure, my car has held its value better than my house.

 

I believe we have a sick economy.

Feb 4, 2013 10:40AM
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kept my last car or 11 years. will keep this one , bought in 2010 for  11 years or so.  Don't live my life worrying about what I drive. It is supposed to be functional not tell my neighbors how much money I spent.
Feb 4, 2013 10:06AM
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New depreciates more than 30% once you take it off the lot and more.
Feb 4, 2013 10:29AM
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I don't make car purchases all that often due to maintaining what I already have.  A used car is always a viable option when it comes time to depart with one of my vehicles but I often find used cars that are more "used up" than not.  More used vehicles seem to have higher mileage on their odometers as compared to the used market of a couple of years ago.  I agree with alot of the comments below. Cost is a major hurdle in our economy's current state and with increases in taxes, and general living expenses going up faster than paychecks, it's no big suprise to see people holding on to what they have longer.
Feb 4, 2013 11:22AM
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Got my 98 Tahoe......152k, clean as a whistle and very dependable.
 
I would love a new Tahoe but the price on those are totally INSANE!!!

Feb 4, 2013 10:54AM
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I don't understand buying a brand new car, putting only a few thousand miles on it, then trading it for 60-70% of what you paid. A car isn't even broken in at that point. YOU ARE JUST WASTING MONEY. We bought a 3 year old Honda Pilot that still looked brand new, with 70,000 miles on it,  for about half what  it cost new. It now has over 160,000 miles on it, still looks new, is paid for, and has had $0 repair costs. That means we have a total cash outlay that is LESS than Mr. Mike Levy LOST on a single trade. It is no wonder people run up so much debt. They show no common sense when spending money.
Feb 4, 2013 9:46AM
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The buyer only has so much money or credit and most new cars,the taxes,the insurance and the state tag and reg fees just eat up the budget so buying a USED Car saves money on the manufacture markup and the taxes that follow this purchase.

Plus the newer cars seem to be plagued with computer issues that require a costly reboot or restore on everything from the seats,the radio and that GPS/phone/email data center thingee!

 The newer cars are made to last just a few years and keep you on the endless car payment cycle

PreOwned what a sugar frosted word for a used car, end the PC murder of our english language

Feb 4, 2013 12:17PM
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Buying used makes more sense when buying luxury vehicles. If you are buying a Certified Toyota Corolla or Camry, you can buy the same vehicle brand new for as little as $3,000 more. Just shop using the internet. Dealers discount high volume new vehicles to the bone. I think you would agree, paying $3,000 more for a new vehicle VS. buying a one year old vehicle that was used as a rental and shows 30,000 miles is not as good a deal. High end vehicles drop enough to make buying used the better deal,  I recommend shopping the internet until you are comfortable with pricing and the vehicle that fits your needs.
Feb 4, 2013 10:35AM
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Used vehicle pricing is a direct result of factory rebates on new vehicles.  Buying a new car is not a bad idea if you plan on holding on to it for 4-5 years.  As long as you work a fair deal, and get all of the incentives coming to you, you should be in good shape. 
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