Used vehicle sales are on the rise due to climbing interest rates and prices. The price gap between new vehicles and comparable 3-year old models has widened to an average of $14,000 (up from $11,000 in 2013.
This coupled with the record number of leases ending and those vehicles re-entering the market is causing some new vehicle shoppers to consider used instead.
While new and used sales usually move up and down together, the fact that new are falling while used is rising indicates that price may be the driving factor and not just a poor market.
For manufacturers, this may mean it is time to take a look at rising prices for their product. For dealers, this is not entirely bad news.
Used-vehicle sales give dealers more opportunities to sell F&I products, such as vehicle service contracts, tire and wheel, appearance protection and prepaid maintenance.
This also means that dealerships that have high numbers of certified pre-owned vehicles may be seeing a lot more opportunities for sales.
With the new car market potentially shrinking, dealers need to be pro-active in reaching shoppers with their message in order to catch them before they visit their competition.
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