According to Cox Automotive, Certified Preowned (CPO) sales are up year-over-year despite expectations of a decline.
CPO sales climbed 1.9% to 205,946 units from January to February, which constituted a change of 7.3% when compared to the same period last year. To date, sales in this segment are nearly 14% higher in 2023 than they were in early 2022. This also coincides with a 3.5% increase in total year-over-year used car sales, which arrived at 1.7 million before March, although a minor slowdown was observed in the sales pace last month.
This positive change in CPO sales came as a surprise to Charlie Chesbrough, senior director of economic industry insights at Cox Automotive, who comments “…the CPO sales pace so far this year is running hotter than expected.” According to Chesbrough, the “initial forecast was for CPO sales to fall a bit this year,” but as a result of OEM efforts to remedy short supplies of off-lease units, “…automakers are expanding their CPO programs to include older vehicles.” Although Cox Automotive maintains that sales in the segment will drop 11% by the end of the year, a note placed at the end of the study indicates that if the first quarter continues to perform well a new forecast may be necessary.
The January and February car market has performed unseasonably well, challenging many pessimistic predictions set at the end of 2022. While this is good news for dealers, it is important to note that more economic headwinds could still lie in wait. Affordability, high interest rates and other financial struggles continue to keep many consumers at home, while threats of a mild recession continue to climb. Ultimately, more data will need to arrive before retailers, CPO or otherwise, can have a clear picture of the road ahead.