Meanwhile, the decline in U.S. new light-vehicle sales is likely to accelerate from a modest loss of perhaps 200,000 units in 2017 from 2016's record 17.54 million, the economists predicted. Silver, who acknowledged he is generally optimistic, forecast 17 million in 2018. Kontos forecast equal declines of 200,000 vehicles in 2017 and 2018.
But economist Michael Vogan, associate director of Moody's Analytics, forecast 16.5 million in 2018. Smoke predicted 16.6 million sales in 2018, noting that lease-pull-ahead deals that automakers offered in September and October moved 2018 sales into this year.
"We'll see a larger decline in 2018 than this year," Smoke said. "But it's a still a pretty healthy environment, though one that favors used-vehicle sales rather than new."
Kontos warned of a potential 2018 downside if the Trump administration cannot win approval of a tax-cut plan.
"Tax cuts are very key to maintain the economy," he said. "It's baked into market expectations. If inaction in Washington results, we'll see some repercussions."
Much of the growth in used-vehicle volume in recent years has been driven by more late-model vehicles returning from three-year leases.
In 2017, the market absorbed a half-million unit jump in off-lease vehicles — to 3.6 million from 3.1 million in 2016 — with less used-vehicle price depreciation than expected, said Patrick Brennan, a Cox Automotive senior vice president.
In 2018, the off-lease growth will be smaller at 300,000 vehicles.
"We're starting to slow but we're not at peak yet," he said, noting Cox expects a crest of 4.3 million off-lease vehicles in 2020. With prices holding up well despite rising volumes, "we're breaking the laws of supply and demand," Brennan said.
But more dealers surveyed quarterly by Cox Automotive are pessimistic about used-vehicle values, especially independents who lack the factory support of franchised dealers and often have less working capital.
Independent used-only dealerships also lean more heavily on 5- to 8-year-old vehicles, which are in shorter supply because of lower new-vehicle production during the Great Recession.
In the latest quarterly survey, more surveyed dealers cited weaker market conditions, lower profits, higher costs and more pressure to lower prices, Brennan said.