Certified pre-owned (CPO) sales are having a good year in 2019.
Sales of CPO vehicles through September total 2.1 million units, an increase of 2.4% year-over-year. Through full-year 2018, CPO sales totaled 2.7 million units, which at the time was a record high.
A steady stream of off-lease supply is expected to keep CPO sales that the strong levels that they’re currently experiencing, according to Cox Automotive.
By the end of 2019, Cox Automotive expects 4.1 million off-lease vehicles to return to the used market. Next year’s supply is expected to be about the same.
Toyota, Honda, and Chevrolet have been the biggest contributors to this year’s CPO sales total. Collectively the three manufacturers represent nearly one third of all CPO sales, Cox Automotive noted.
The strength of CPO units comes at a time when the new-vehicle market is struggling. Just this past month, in September, new-vehicle sales dropped 11.3%.
One main factor playing into CPO’s favor is price. Current average new-vehicle transaction price is $37,325. The average CPO price is $27,737, according to Cox Automotive.
And, while the nearly $10,000 difference in average price is significant, it appears that the delta between new and CPO is beginning to shrink. The difference in price between a new and CPO vehicle ($37,325 vs. $27,737) represents a 3% year-over-year reduction as of August 2019.