November was a predominantly stable month for the used vehicle market, even though sales volumes, pricing and inventory levels trended in unsatisfactory directions.
According to Cox Automotive, dealers sold an estimated 1.4 million used vehicles over the course of November, a sharp decline of 12.8% from October’s 1.6 million. While this represents one of the most significant month-over-month sales declines in the preowned segment since the start of 2023, retailer sales still improved on a year-over-year basis by 7.4%.
Dealers seem to have rapidly adjusted to the slower sales pace, protecting their businesses from an apparently industry-wide trend of cooling demand. Used vehicle inventories rose 2.4% throughout November, finishing the month at roughly 2.36 million units. Despite this increase, Cox Automotive notes that days’ supply dropped to 52 days from October’s 53 and last November’s 56, indicating that retailers limited acquisitions to retain a stronger buffer against slowing sales.
However, used vehicle prices appear to have slid in November as the segment continued to normalize from a period of heavily inflated values during the COVID pandemic. The average listing price of a preowned vehicle during the month was $26,091, 2% less than in October.
The used vehicle market is on track to finish the year slightly behind 2022’s pace. Excluding private-party transactions, sales are approaching 19 million units before next January, just 100,000 units behind last year’s total. While the preowned segment has proven weaker in 2023 than many thought likely at this point in 2022, dealers have also demonstrated their adeptness at balancing inventory and demand. As long as retailers can remain flexible, the used vehicle segment will continue to be an efficient and profitable resource for the retail automotive sector to leverage.
