17% Planning to Purchase Used Vehicles
In a press briefing conducted via conference call, Jonathan Banks, executive analyst for NADA Used Car Guide, presented an analysis and forecast of the used-vehicle market in the U.S., noting the used-vehicle supply is swelling and should Reach Pre-Recession Levels in 2017.
Banks said, "The used-car market has enjoyed high demand and short supply after the recession causing used-car prices to reach all-time highs. As the automotive market continues its rapid recovery, fundamentals in the automotive market will inevitably drive used-car prices down. The question everybody's asking relates to how much prices will drop and when."
For 2015, NADA Used Car Guide's used-vehicle price outlook accounts for several factors resulting from changes in the economy and financial sectors.
Positive factors affecting used-vehicle price outlook:
- Strong economic growth
- New products
- Healthy employment gains
- Higher home prices
- Lower gasoline prices
Negative factors affecting used-vehicle price outlook:
- Higher used-vehicle supply
- Increased new-market pressure (i.e., flat new vehicle prices or higher incentives)
- Less favorable credit conditions
"A burgeoning off-lease supply of used vehicles will drive late-model [5 years old or newer] volume up 8% this year. While late-model supply will reach pre-recession levels in 2017, overall supply won't reach this point until a few years later. Off-lease supply will be dominated by compact cars and utilities, along with mid-size cars and utilities, which is a pre-recession trend reversal," Mr. Banks said.
According to NADA Used Car Guide analysis, the consequence of declining used prices coupled with recent finance trends creates risk for consumers having negative equity in their vehicles. This may result in residual losses as the high volume of lease returns flow back into the market now and over the next 3 years.
With 16.8% of adults planning to buy used vehicles this year, marketers should know more about this audience. AudienceSCAN reported 28% of used-vehicle shoppers are aged 25–34, yet another 22% are between 18 and 24.
When they're not searching for their next vehicle, 24% are playing pool. They're 194% more likely than average shoppers to STRONGLY agree that they try to support companies that sponsor a favorite sports team or athlete.
Used car/truck shoppers agree that these media are the most helpful when shopping for a car/truck: Newspaper (19%), TV (12%) and Emailed news/offers (7%).
AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports inåÊAdMall.