Used Sales Benefit During Pandemic

By Staff Writer July 08, 2020

Unique market conditions due to the coronavirus (COVID-19) pandemic could be driving more consumers out of the new market and into used vehicles, according to the car shopping experts at Edmunds. Edmunds analysts note that June used vehicle finance figures and Edmunds website data indicate shifts in shopping behavior that are not usual for the used vehicle market and could point to more typical new car shoppers entering the fray.

Edmunds data shows that interest rates for used vehicles dropped to the lowest level since January 2018, with the average annual percentage rate (APR) falling to 7.8 percent in June, compared to 8.3 percent in May and 8.6 percent a year ago. The average used down payment climbed to $3,167 in June, surpassing $3,000 for the first time that Edmunds has on record dating back to 2007. Edmunds data also reveals that 26.3 percent of used vehicle sales with a trade-in had negative equity in June, the lowest level so far in 2020.

Seventy-six percent of people who bought a new car looked at a used car along the way
Cross-shopping used vehicles online has skyrocketed during the pandemic

According to Edmunds website data, more new shoppers are cross-shopping used vehicles than before COVID-19. Twenty-nine percent of new vehicle shoppers between mid-May and mid-June also considered used, compared to 24 percent between mid-January and early March.

“More consumers are looking for value in their next car purchase due to the economic challenges of the coronavirus pandemic, so the more favorable loan conditions we’re seeing are likely a direct result of more consumers with good credit shifting into the used market,” said Jessica Caldwell, Edmunds’ executive director of insights.

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Last modified on Wednesday, 15 July 2020 16:52

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