Posted December 01, 2019 11:08:55The second hand car market in the United States is in a boom as the demand for secondhand vehicles continues to surge, according to the International Association of Manufacturers.
The report, released today by the association, says the average price of a secondhand vehicle in the US jumped 10 per cent in the first six months of 2018 to $1,400, with most of that increase coming from the Midwest and Northeast.
“Secondhand vehicles are becoming a popular purchase choice for consumers looking for a new vehicle, but the growing demand for these vehicles is also creating demand for quality and value in secondhand cars,” said James E. Anderson, IAM’s chief economist.
“The growing demand is driving the price of secondhand auto parts and services to record levels, increasing the demand and the demand has been growing,” he said.
The average price for a second hand vehicle rose 12 per cent from $1.056 in the second quarter of 2018, the report said.
The number of cars sold on the US secondary market rose by 6.4 per cent.
In 2017, the IAM estimated that the total market for second hand vehicles in the U.S. reached $2.7 trillion.
The number of second hand sales in the country rose by 18 per cent over the past year, but overall demand has not yet picked up, the study found.
It said that while there were still some companies that sold secondhand automobiles on the secondary market, they were not as big as in previous years, with smaller manufacturers.
The industry is also experiencing an upward trend in the number of new car sales.
The IAM said that of the approximately 1.8 million secondhand sales in 2018, 1.6 million were for brand-name vehicles and a further 1.2 million were in models made by manufacturers.
It also said that the majority of second-year sales in 2017 were in second-tier vehicles, including those sold by manufacturers like General Motors and Toyota.
“We believe the industry is facing a tough time, with a number of large manufacturers and retailers struggling to keep up with the demand of customers looking for quality, affordable and environmentally friendly vehicles,” Anderson said.
“In addition, there are a number companies that have been unable to meet the growing market demand for new car models and have limited inventory,” he added.