There has been turbulence and uncertainty in the used vehicle market over the past three years.
The following recaps the results of our dealer clients for the nine months ended September 30, 2023.
Retail Used Vehicle Profitability per Unit Weakens
| 2023 | 2022 | 2021 | |
| Gross Profit/Vehicle | $2,020 | $2,528 | $2,352 |
| F&I Income/Vehicle | $1,552 | $1,728 | $1,399 |
| Combined/Vehicle | $3,572 | $4,256 | $3,751 |
Though dropping from the most recent two years, the gross profit and F&I income earned on a per vehicle basis in 2023 surpasses the levels from combined 2020 and prior.
Unit Sales
- Nearly 62% of our dealer clients reported an increase in used retail units sold. On average, dealer clients sold 19 more units when compared to the same period last year.
- The average sales price of a used retail vehicle was approximately $29,500 compared to $30,100 for the same period.
As illustrated above, the used vehicle market is trending back to historical norms. Sales prices are returning to pre pandemic levels and margins are shrinking. Similar to new, consumers are sensitive to interest rates and what their monthly payments will be. This in turn affects a dealer’s ability to sell F&I products as most consumers add it to the amount they finance. Dealers will need to closely manage their used vehicle departments to make sure vehicles are purchased and priced properly.
If you have any questions regarding this article, please contact Charlie Paolino at CPaolino@DowneyCoCPA.com or at 800-849-6022.
