Used car sales rebound in July, inventory tightens

After a rocky June full of dealership disruptions that inflated used vehicle inventories and pushed retail sales lower, July’s data provides a clearer picture of where things stand as the market recovers.

Driving the news: Retail used car sales saw a 27.6% increase from June and were up 16.5% again last year to 1.6 million units.

• Certified pre-owned (CPO) vehicles also had a decent month, with sales inching up 1.5% from June to 211,562 units. But compared to last year, CPO sales were still down 8.5%.

Cause and effect: The recovery in sales has pushed the average used car days’ supply from 53 to 41 days in July. There were 2.17 million unsold used cars as of Aug. 1, down 3% year-over-year and 50,000 units fewer than at the start of July.

• With inventory tightening, the average listing price edged up to $25,415 in July, though it’s still down 5% from July 2023.

• Cox attributes this month-over-month rise to changes in the mix of vehicles sold. 0-to-2-year-old cars captured more sales in July than in months past.

Inventory crunch: Affordability continues to be a tough nut to crack for consumers, especially with these cheaper used vehicles in short supply.

• At the lower end of the market, cars priced under $15,000 are getting harder to find.

• They’re sitting at just 31 days’ supply, which is 29% less than the overall market average.

• This shift towards higher-priced, newer inventory could be a double-edged sword: while it helps boost overall revenue, it also risks alienating price-sensitive buyers.

Bottom line: July’s strong sales numbers are encouraging, but the market isn’t out of the woods yet. With inventory getting tighter and the lingering effects of June’s disruptions still in play, dealers will need to stay nimble as they manage inventory and pricing in the months ahead.

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