Used car retail sales benefited from this past tax season, which ended on the tax filing deadline of April 15.
According to a recent Cox Automotive analysis, March used car sales were up 5% compared to the same period last year. Better weather and tax refund season usually spur car sales in the early spring, including the sale of used cars specifically.
“Historically used retail sales peak in March or April of a given year as tax refunds inject money into the economy,” Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive, said in a statement in March.
In addition, per the IRS, the average tax refund amount was 2.1% bigger than last year’s average refund.
Higher sales allowed used car supply — the supply of unsold used cars at dealers — to fall to its lowest level in the past year, according to the Cox analysis. Using vAuto Live Market data to estimate a daily retail sales measure for a 30-day period, Cox determined there were 44 days of used vehicle supply at the start of April, a 4% decline from the 46 days of supply available in early March. The April 2024 daily supply estimate was similar to days’ supply in April 2023, though the total volume of used vehicle supply increased 6% year over year to approximately 2.22 million used vehicles.
Though the analysis demonstrates that used car prices remain higher than they were three years ago, it also shows that prices have fallen over the past year; at the beginning of April, the average used car price — $25,540 — was 4% lower than the average used car price in early April 2023.
The Cox analysis also found that used vehicle supply is more constrained at lower price points. In early April, there were just 33 days’ supply of used cars that cost less than $15,000, which is 25% fewer days than that of used car supply at higher price levels.
