Even as the used vehicle market works to find a more normalized state, considerable distance continues between different segments and market forces.

According to a report by DesRosiers Automotive Consultants produced in concert with the Used Car Dealers Association, even as the topography of activity has flattened from the most uncertain days of the pandemic, there’s still settling out to do.

Used cars sales do provide a knock-on effect for the traditional aftermarket. Used car dealers often use aftermarket parts when preparing vehicles for sale, and used vehicles, even those recently purchased, are more likely to find their way to independent service facilities than new vehicles.

“The used vehicle market in 2023 presented a story of conflicting forces,” say the resarch authors. “On one hand, used vehicle prices remained high by historical standards as supply remained tight in the first half of the year. On the other hand, the recovery in the new light vehicle market in the second half of 2023 is leading some consumers to return to the new car market now that vehicles are finally available.”

Over 400 UCDA members responded to our survey with both independent dealers and the used vehicle arms of franchised new vehicle dealers offering their view on the used vehicle market in 2023 as well as their expectations as the market moves through 2024.

“With a resurgent new vehicle market, the outlook for the used vehicle sector will be fascinating to watch” commented Andrew King, Managing Partner at DAC. He continued,

“While some consumers are turning their attention back to the new vehicle market, there will be a shortage of recent model year used vehicles for the next few years as off-lease numbers plummet. In addition, climbing new vehicle prices, ZEV mandates, and financing shifts all mean that the used vehicle market will be highly dynamic in 2024 and beyond.”

When asked about their sales expectations for 2024, both franchised new vehicle dealers and independent used vehicle dealers expressed optimism as usual. On average, unit sales are expected to grow from 203 to 224 units. Among franchised new dealers, sales are expected to grow from an average of 311 units to 341. Meanwhile, sales among independent used dealers are expected to rise from 160 to 177 units.

When asked about supply and the sourcing of vehicles over the past six months—a major point of concern in recent years—dealers were decidedly split. The plurality of independent used vehicle dealers cited a worsening supply situation, accounting for 43.3% of responses. Alternatively, 37.3% of franchised new vehicle dealers pointed towards an improved situation as new vehicle sales improved and they gained access to more trade-ins. Only 13.3% of franchised new vehicle dealers pointed towards more difficult sourcing for used vehicles in the last six months.