Used car sales have been hot lately for auto retailers, surpassing new car sales in third quarter earnings reports. Finding easier credit and increasing prices seen on new car window stickers have been drivers of used vehicle sales. Growing popularity in certified pre-owned vehicles is also helping. Here are the latest results from several large, publicly traded dealers.……….
- CarMax, the nation’s largest retailer of used vehicles, saw a 14% jump in used vehicles sales in the third quarter compared to a 10.5% for new vehicle sales. Earnings saw a huge gain – 28% for the quarter, which was the highest in several quarters. CarMax operates about 143 stores in 72 markets, and just opened four locations in the third quarter.
- Lithia Motors reported that Q3 same-store sales of used retail vehicles increased 13% from a year ago, with an 11% increase in new car sales. Lithia expects used sales to increase 31.5% this year and 38% next year. The auto dealer’s earnings climbed 17% in Q3, and sales increased 21%.
- Penske Automotive Group had a sales increase by 11.6% of used vehicles in the third quarter with a 9.2% gain in new vehicle sales. Penske’s same-store sales of used vehicles increased 16.6% during that quarter.
- Group 1 Automotive reported that strong demand for used vehicles helped its profit grow 31% in the third quarter, which was the biggest increase in two years. Used car sales grew 16.2%, while new vehicle sales increased by 9.7%.
Strong used vehicle sales volumes with high profit margins are helping these dealer chains see strong stock price trends. New vehicle sales are expected to be strong, as well, and now there appears to be more of a balance between new and used vehicles in pricing and profits.