WASHINGTON, D.C. — Despite bearish calls in the automotive industry spurred by an expected influx of off-lease volume, consumer demand for replacement vehicles should keep used-car prices stable, Mike Wall, executive director of automotive analysis at IHS Markit, said in a session at CBA Live this week.
Approximately 28% to 30% of retail automotive sales are leases, Wall said. Every three years, dealers see an influx of off-lease vehicles coming to market, and with that influx comes an expectation of falling used-vehicle prices.
But data collected by IHS Markit supports steady prices. “We’re not saying these buyers are going to come in and buy a new vehicle, they don’t need to,” Wall said. “They’re going to buy a used vehicle, a certified preowned, maybe a 2-, 3-, or 4-year old vehicle coming off of lease. When we think about the outlook for used-vehicle prices and a broader fallout or deterioration in used-vehicle prices, we’re not in that camp because we see this sort of ready replacement demand that’s still out there.”