With the shortage of new vehicles, consumers have turned to used vehicles as an alternative. As the supply of used vehicles has also tightened, both the costs and sales prices have risen in 2021. The following details the results of activity in the retail used vehicle market.
Used Unit Sales
- Over 81% of dealer clients saw the number of retail units sold increase when comparing September 30, 2021 to September 30, 2020. On average they sold 52 more vehicles year over year.
- The average sales price increased by an astounding 17%. For 2020 the average sale price increase from 2019 was only 2.9%.
Profits
- 96% of dealers reported an increase in their gross profit margin.
- On average, 2021 used gross margins came in at 8.9% compared to 6.4% in 2020 – a healthy 2.5% increase.
Retail Used Vehicle Profitability per Unit
| 2021 | 2020 | 2019 | |
| Gross Profit/Vehicle | $2,352 | $1,414 | $1,215 |
| F&I Income/Vehicle | $1,399 | $1,181 | $1,124 |
| Combined/Vehicle | $3,751 | $2,595 | $2,339 |
As detailed above, dealers continue to report strong results in their used vehicle departments. The demand for used vehicles has remained robust. As dealers are aware, the recent struggle has been their ability to acquire used vehicles as competition for them remains high. It is imperative for dealers to monitor their used inventory levels and pricing policies to ensure the department maintains its level of profitability.
If you have any questions regarding this article, please contact Charlie Paolino at CPaolino@DowneyCoCPA.com or at 800-849-6022.
