Edmunds: Strong Q2 Prices, NADA: 50% Improvement in Vehicle Reliability August 27, 2015

Used Vehicle Pricing Highest Since Edmunds Began Tracking Data

Jessica Caldwell
Director of Industry Analysis

Used vehicles saw their highest price in the second quarter since Edmunds.com has been tracking the data – reaching an average of $18,800. Market strength is coming from an influx of newer vehicles and strong demand and pricing for older used vehicles. Car shoppers have been financing their vehicles over a longer period of time to afford the higher prices with average APRs rising. Shoppers are also returning to the “new vs. used” question as the price gap tightens is some segments.

See Edmunds Q2 2015 Used Vehicle Market Report

Near-New (5-Years Old or Newer) Vehicles Led 5.1% Y-O-Y Lift in Volume:
Near-new inventory pumped up by lease returns and trade-ins, supporting CPO sales.

Average Amount Financed per Vehicle is $20,732 Up 3% from Last Year:
Nearly 60% of used buyers seeing 5% or lower APR, but many have APRs over 10%.

While Off-Lease Playing Big Role in Market, Trade-ins Sizable Part of Near-New:
About 25% of trade-ins from used vehicles contributed towards near new inventory.

NADA UCG Reports on How Vehicle Durability Has Strengthened Used Market

Jonathan Banks
Executive Automotive Analyst
NADA Used Car Guide

Vehicle durability has seen substantial improvements over the past 20 years, which has eased concerns about the long-term viability of used vehicles and has given aging used vehicles stronger value. J.D. Power and Associates’ annual U.S. Vehicle Dependability Study data shows vehicle dependability has improved by nearly 50% in the last decade. The gap in quality across brands has narrowed dramatically in the J.D. Power studies. Another improvement has been improvements in engine, braking and suspension systems over the past decade.

Lasting Longer: How Better Quality Is Affecting Used Vehicle Demand

Increasing Odometer Mileage More Evidence of Improving Durability:
Compact and midsize cars 10 years in age increased from 126K miles in 2004 to 133K in 2014.

Used Vehicles Playing a More Prominent Role at Franchised Dealerships:
Dealers had been focusing on trade-ins at wholesale, and durability has helped them expand pricing and marketing.

Improved Quality and Durability Make Late-Model Used More Attractive to Consumers:
Autotrader CPO study reports 33% of new car shoppers would consider purchasing used, up from 26% in 2012.
Expert Video Recap
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NADA UCG video August 2015
August 2015 Used Car Industry Update

How vehi­cle seg­ments have per­formed over the past month with trucks doing excep­tion­ally well. Plus, NADA UCG’s fore­cast for August performance.

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The daily chal­lenge of dealer sales teams is iden­ti­fy­ing the shop­per as early as pos­si­ble. How Equifax Auto­mo­tive can deliver key infor­ma­tion to these teams.

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