Certified pre-owned vehicle sales topped 2.7 million units last year, a rise of 2.1 percent over 2017, according to the Automotive News Data Center. It marked an eighth-straight year of record sales.
Another CPO sales record this year?
Zo Rahim, research manager for Cox Automotive, sees 2019 as potentially a ninth record-breaking year: Cox is forecasting sales of 2.75 million units.
What's driving the growth?
"For CPO sales over the last eight years, going on nine years this year, it's favorable supply as well as strong used retail demand," Rahim said.
Sales of CPOs have been strong because the used-vehicle market as a whole has been robust.
New-vehicle transaction prices have been going up, and interest rates have been on a steady climb following the Great Recession. These affordability issues appear to be nudging more buyers into used cars and trucks.
But Rahim said that product mix is also becoming more favorable to American consumers on the used side, including for CPO vehicles, as more light trucks — especially crossovers — come back off lease.
"So that market is getting more and more light truck-oriented," he said. It's still not at the new-vehicle-sales level, but it continues to shift, he said.
Rahim noted that while Toyota, Honda and Chevrolet have been dominating CPO sales, brands with favorable product mixes for CUVs and SUVs, such as Jeep, appear to be grabbing market share.
Indeed, according to Automotive News Data Center figures, Jeep posted a 21.2 percent rise in CPO sales last year. Toyota topped CPO sales with 344,796 units sold in 2018, a decline of 6.8 percent.
It was followed by Honda at 265,120, an increase of 1.9 percent; and Chevrolet at 241,765, a rise of 1.7 percent. CPO sales are also expected to be strong in 2019 because of the sheer number of vehicles coming back from leases.
Lease maturities rose 11 percent in 2018 to 3.85 million and are expected to peak at 4.08 million during the first half of this year, according to Cox estimates.
In the back half of 2019 and into 2020, the off-lease supply is expected to decrease. Along with this, the share of cars coming in off lease is expected to continue to decline.
Overall, used-vehicle sales are projected by Cox to be flat at 39.5 million units in 2019.