According to economists at Cox Automotive, there should be roughly 2.7 million pre-owned vehicle sales during 2018. The forecast, should it come to pass, would mean another year of record CPO sales. At the same time, it still signals a slowdown of growth.
CPO Mixed Results
Autodata Corp., released figures that highlight this mixed result, In 2017, 2,645,718 CPO vehicles were sold, while 2016 saw 2,642,986 CPO sales. Impressive numbers, but only a 0.1 gain between the two years. To put that in perspective, CPO sales had climbed 3.5 percent in 2016, 9 percent in 2015 and an impressive 10.8 perfect in 2014.
CPO numbers set a record for 2017
Jonathan Smoke, chief economist at Cox Automotive, confirmed the record breaking sales, along with the downward trend. “Technically, the CPO numbers set a record for 2017. But it was a less than 1-percent gain over 2016,” he said. “So we’ve started to see a real deceleration in CPO volumes, and when you drill into it, you basically start to see that we’re no longer seeing substantial growth in non-luxury CPO, and that’s really what had been driving a lot of growth in recent years.”
The biggest movers when it comes to CPO are Toyota and non-luxury brands of GM (Buick, Chevrolet and GMC). Both of these companies saw double digit declines in CPO sales with Toyota falling 11.3 percent and GM losing 10.1 percent.
No need to panic
While the trend isn't news to celebrate, it also isn't causing a panic. It simply comes down to the buyer and sensitivity … to payments and price points,” Smoke reported. In some used-car models, the value simply isn't there. Smoke points out that "[C]onsumers [aren't] seeing as much value from the increase they have to pay for a CPO unit versus what they can drive down the street and buy non-CPO, but in the same kind of condition." Moving forward, Smoke thinks the CPO market may shrink in some ways but “will probably grow again, but it’ll be a changing composition.”