Chicago Automobile Trade Association

Off-lease cars set to drive down U.S. used-vehicle values, NADA says

April 6, 2018
Large numbers of ex-lease cars coming onto the used-car market is set to drive down used-car prices in the US and put pressure on new-car sales.
That’s the view of Patrick Manzi, senior economist of the National Automobile Dealers Association, speaking at last month’s NADA convention in Las Vegas. He cited figures from Cox Automotive indicating that 3.9 million lease returns are expected in 2018, an increase of 8 percent from 2017.
"The rise in off-lease volumes will spur growth in the certified pre-owned used market, and 2018 could very well be a record year for CPO sales," he said.
"CPO sales provide customers with the peace of mind of a factory warranty and dealership inspection process."
Manzi said that the influx of off-lease vehicles will put pressure on new-vehicle sales because the increased supply will drive down used-vehicle prices.
"Consumers will see a widening price difference between a new vehicle and a similarly equipped used or CPO vehicle, and will consider buying used," he said.
Despite the economic headwinds likely to impact the retail-auto industry this year, the NADA is sticking to its original sales forecast of 16.7 million new cars and light trucks in 2018.


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