14 days ago • Posted by William Ramstein
The used car market could still offers profitable scenarios
The US used vehicle market is roughly three times the size of the new vehicle market, with ~40mm units sold per year, on average, over the last decade. The used vehicle market is also much less cyclical, more stable, and even more fragmented than the new vehicle market, with the top 100 dealers accounting for <10% of used unit sales. These attractive characteristics have helped differentiate the secondary market, and particularly strong/sophisticated players within it, with average gross margins among franchised dealers for used vehicle sales (~11% as of 2019) that are 2-3x that of new vehicle sales (~5.5%).
Source: BoA Research