Rising interest rates and vehicle prices are pushing car and truck buyers away from new vehicles and into used, Edmunds said Wednesday.
The price gap between new and 3-year-old used vehicles was 62 percent in 2018 and represented an average of $14,000, according to Edmunds. That compares with a gap of 56 percent that averaged about $11,000 in 2013. Meanwhile, new-vehicle interest rates grew 17 percent in 2018, while rates for used vehicles rose just 9 percent.
With a record level of lease returns expected this year, used-vehicle sales will likely hit their highest level since the recession, Edmunds said. Used-vehicle sales are forecast to hit 41 million in 2019, up from 40.2 million in 2018. New-vehicle sales are widely projected to dip below 17 million this year, after reaching 17.3 million in 2018.
Used-vehicle sales give dealers more opportunities to sell F&I products, such as vehicle service contracts, tire and wheel, appearance protection and prepaid maintenance.
Ivan Drury, Edmunds' senior manager of industry analysis, said sales of new and used vehicles typically follow the same pattern -- they rise and fall together. "But now we're seeing new-vehicle sales fall while used rise, indicating the market has reached a flashpoint," Drury said in a statement. "New cars are getting so expensive that they're out of reach for many car shoppers, but there are so many more affordable used vehicles coming off lease that the market is naturally shifting in that direction."
That shift includes certified pre-owned vehicle sales, Drury said. Google Trends data show search interest for certified pre-owned vehicles has grown over the last five years.