Used Car Sales in 2015 Showed Sharp Increase

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Best used car values are those used cars most in demand

Audi A6 2013 photo
2013 Audi A6 can be bought certified pre-owned. (c) Audi

Used car sales in 2015 grew 5.6 percent in 2015, which pretty much matches new car growth of 5.7 percent. Yet a heck of a lot more used cars were sold.

The annual used car industry report by Edmunds shows where the current sweet spots are for used car deals in terms of declining values. You may be surprised to learn that the most in-demand used cars have dropping values.

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Used Car Sales in 2015

Customers inspect a certified pre-owned Cadillac. Now is a good time to stay away from used cars being sold at GM dealerships. Photo (c) Getty Images

Used car sales climbed 5.6 percent last year to a total of 38.3 million, according to the report released by car shopping destination Edmunds.com. The 2015 Used Vehicle Market Report further reveals that 2015 was a milestone year that saw record high used car prices (an average of $18,600 per vehicle sold) and an all-time high for certified pre-owned (CPO) sales (2.55 million).

The 38,276,140 used car sales recorded in 2015 was the highest single-year total since 2007, when 38,279,709 used cars changed hands. Franchise dealers, meanwhile, set a single-year record with 11.4 million used car sales.

Franchised dealers are those dealers with new car lots. They are the only dealers who can sell manufacturer certified pre-owned cars. All other certified pre-owned cars sold by independent used car dealers are basically coming with high-price insurance policies that are predicated on denying claims.

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Average age and price of used cars in 2015

2012 Ford Fusion. (c) Ford

Edmunds says the heavy influx of new car lease returns weighed the average age of used vehicles sold down to 4.4 years in 2015 from the previous year’s 4.6 years. 54 percent of used vehicles sold last year were three years old or younger. And average used car transaction prices set a new record in 2015, increasing 4.6 percent from $17,700 in 2014 to $18,600 in 2015.

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Where Are the Used Car Values in 2016?

Hyundai top certified pre-owned program
Hyundai is the top certified pre-owned program among popular manufacturers for 2011. (c) Hyundai

"The key factor driving all of the trends in used car sales today is the popularity of leasing, which is bringing younger and higher quality used cars back to the market," says Edmunds.com director of industry analysis Jessica Caldwell. "We’re truly in the midst of a Golden Age for CPO and near-new used cars. And with a record number of lease terminations expected in 2016, for the foreseeable future there certainly will be no shortage of supply to meet the growing demand for used cars."

What’s it mean for you as a used car buyer? Three-year old cars, those coming off lease, dropped in value in 2015 and should continue to do so in 2016. Also dropping in value are six-year old used cars, which is another magic number for used cars being traded in for new cars.

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Certified Pre-Owned Sales in 2015

Cadillac certified pre-owned benefits. (c) GM

According to Edmunds, there were more certified pre-owned sales in 2015 (2.55 million) than in any year on record. It said CPO sales have increased “a staggering 55 percent” in the last five years.

Sales are reaching a point where certified pre-owned accounted for 22.4 percent of all franchise dealers’ used car sales in 2015. That is up from 20.9 percent in 2014, and up from 18.8 percent in 2010. It also means we are fast approaching a point where one in four used cars sold by franchised dealers will be certified pre-owned, which means stronger profits for those dealers.

Certified pre-owned buyers also tends to skew older than regular used car buyers. More than 70 percent are 34 years of age or older while 58 percent of regular used cars are bought by people 34 and older.

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The Best Researchers for Used Cars

Maybe it has something to do with the fact that they are paying more, but Edmunds said in its report that certified pre-owned shoppers spend twice as much time researching their purchases.

Another interesting trend, which seems the opposite of where the Internet is heading, is certified pre-owned shoppers, at least when using Edmunds, are doing their research from their desktops and not mobile platforms.

It’s also interesting to note that used car sellers aren’t inflating claims on the condition of their used cars. OK, granted there will always be those that do but not to the extent one might think. Used car sellers seem to be inclined to not give their cars the highest ratings possible when researching trade-in values.