It appears that the used-car market this month is getting a nice bump from 2012 being a leap year. Otherwise, CNW Research suggested February’s used sales would have been rather static this month.
Specifically, CNW is forecasting 1.95 million used sales for the month, an 8.1-percent hike from February 2011 on an unadjusted basis.
“Adjusted, however, sales would barely break even with last year,” noted CNW president Art Spinella.
Delving into more specifics, CNW believes franchised dealers will move 650,000 used units this month for a 5-percent year-over-year gain, while independents are projected to dip 4.2 percent with 640,000 used sales. The firm is predicting a 27.8-percent spike in private-party sales, which are forecasted at 658,000 units.
Breaking it down by segment, January showed larger segments grabbing more attention from consumers, CNW said. For instance, the market shares for small pickups (10.84 percent) and full-size pickups (13.06 percent) were either at or close behind the highest levels seen in two years.
Conversely, small car market share dropped dramatically.
But don’t count on these trends to last, Spinella said.
“Even under threat of higher fuel bills, consumers are still gravitating toward larger vehicles. Small cars, for example, took about 16 percent of the used market in January, down two full points from year ago and seven points lower than in September of last year,” he noted. “Expect that to change as gas prices move upward.”
He went on to point out: “This is a peculiar time of year for used-car sales, shifting to the warmer climates, which in turn, generates more larger-vehicle sales. The true test will be in April.”
Pent-Up Demand for Used Vehicles
While the leap year has brought seemingly stronger February sales, the number of buyers waiting in the wings to make a purchase has gone down.
CNW is anticipating pent-up demand in the used-car market will total approximately 83,500 shoppers. This compares to 94,000 used-car intenders in January and 92,000 in February 2011.
Put another way, pent-up demand this month is projected to be only 90.8 percent of its level a year ago. Meanwhile, in January, it was up 6.2 percent year-over-year.
“The average delay in making an acquisition among those who have postponed a purchase is around 2.4 months, statistically no different than it was in January but down from February 2011’s three months,” Spinella noted. The average delay in February 2011 was 3.01 months.
“And while it’s too early to make much of the data, the share of postponers who still plan to buy a used car has dipped to 94.9 percent, compared to 95.17 percent in January,” he added. “Much of that can be weather rather than economics at play, although the latter typically drives such intentions.”
Used Pricing
When it comes to the prices that used cars are fetching, conditions are much better than expected, Spinella noted.
For franchised dealers, February transactions prices are up 4.28 percent year-over-year at $11,090, which marks a 2.17-percent hike from January. Asking prices are up 3.21 percent year-over-year at $11,652. This represents at 1.19 percent sequential hike.
Independents have seen transaction prices average $9,784, which is up 10.93 percent year-over-year and 0.72 percent month-over-month.
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