The 2018 U.S. used-vehicle marketplace is shaping up as less abnormal than last year but hardly old-fashioned.
Forecasters are expecting lower price volatility than 2017's record highs and unusual peak in the fall rather than in the spring. They also see higher volumes of used-vehicle sales in 2018, driven by a more desirable mix of late-model vehicles entering the marketplace and higher take-home pay as the new federal tax law is implemented.
The IRS issued new income tax withholding instructions to U.S. employers earlier this month. In response, Cox Automotive Chief Economist Jonathan Smoke said the company revised upward its forecast of 2018 total used-vehicle sales to 39.5 million from 39.3 million.
"We believe about 85 percent of U.S. households will get a boost in take-home pay," Smoke said in a conference call with investment analysts and reporters.
The forecast revision lifts anticipated volume growth to more than a full percentage point from Cox Automotive's preliminary 2017 count of 39 million used-vehicle transactions for 2017. That may be a modest increase on the used-vehicle side, but most forecasters expect 2018 U.S. new light-vehicle sales to decline 2 to 4 percent to fewer than 17 million units.