At a time when automakers are desperate for every sale in the US, a remarkable number of shoppers are drifting out of the new car market and purchasing a used car instead.


The results of a survey by Edmunds also chime with reports of dealers in Britain doing brisk business on used cars as hard-pressed consumers respond to economic pressures and collapsed used car prices.


Edmunds.com has determined that approximately 511,000 used cars sold in the US in the past three months would have been new car sales in a more normal economy.


Projecting ahead, this could represent a seasonally adjusted annual rate (SAAR) of more than two million vehicles, which equates to more than 15% of total new car sales. In manufacturing terms, that amounts to about two assembly plants’ new car production, reported Edmunds’ AutoObserver.com. 
 
“It is safe to assume that many shoppers who normally would be tempted by ‘new car smell’ and the latest automotive technology made a more cost-conscious decision because of economic pressures,” surmised Edmunds.com Senior Analyst David Tompkins, PhD, whose team studied historical ratios of online research and actual sales of new cars versus used cars.
 
According to Dr. Tompkins, about two-thirds of incremental used car sales, about 343,000 cars, were sold to consumers who, in a normal market, would have considered a new car but instead began their shopping process with a used car focus. The remaining one-third, about 167,000 vehicles, were bought by people who demonstrated purchase intent for new vehicles, but, at some point in the buying process, switched to used cars.
 
“Right now, dealers need to maximize their short-term profitability more than ever,” observed Edmunds.com CEO Jeremy Anwyl. “So it is really no surprise to learn that salespeople are directing some car buyers toward used cars, which have historically delivered a much higher profit margin to the dealer.”
 
Edmunds.com’s research shows that recent model year used vehicles have been sold at a faster rate by franchise dealerships lately; in the past, vehicles that were one model year old made up about 11% of all dealership sales, but lately they have jumped to 16%.

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